The Internationalization Of Producer Services

Authored by: Sharmistha Bagchi-Sen , Torsten Schunder

The Routledge Companion to the Geography of International Business

Print publication date:  March  2018
Online publication date:  March  2018

Print ISBN: 9781138953345
eBook ISBN: 9781315667379
Adobe ISBN:


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Theoretical and empirical research explaining international transaction behavior of multinational enterprises (MNEs) continues to enhance our understanding of International Business. While mostly applied to manufacturing, an increasing body of literature explores foreign direct investment (FDI) in services, and especially cross-border investments in producer services as this specific subset of services is enabling other businesses to operate more successfully by supplying them with expertise. Advanced producer and professional service firms include financial, business, and ICT services and are facilitators of business, International Business, and globalization as they enable clients to expand, optimize, and work in global environments, and are a key measure of the importance and power of cities around the globe. Given this important key function in the global economy, we focus on this subset of the service industry in this chapter. Producer services distinguish themselves from other services by mainly serving the intermediate demand of producers rather than meeting the final demand of consumers. Financial and legal services, advertising, accounting, and insurance services are seen traditionally as part of this subgroup but now other creative services (e.g., including R&D services) supplying knowledge to other corporations are increasingly seen as part of this subgroup.

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