Joint production
Also called: Joint venture · Topic: Globalisation and MNCs · NCERT: Class 10, Ch 4 "Globalisation and the Indian Economy"
Meaning
Joint production is one way an MNC sets up production in another country. The MNC produces together with a local company. The local partner gains in two ways. It gets money for more investment, such as new machines for faster production. It also gets the latest production technology, which is called technology transfer. For the MNC, the partner brings local knowledge and an existing base to build on.
Example
Ford, a US MNC, came to India in 1995. It invested ₹1,700 crore in a plant near Chennai, working with the Indian company Mahindra and Mahindra.
Don't confuse with
- Acquisition: the MNC buys a local firm outright rather than working with it as a partner. NCERT calls acquisition the most common route. Example: Cargill Foods buying Parakh Foods.
Related concepts
- Multinational corporation
- Technology transfer
- Acquisition of local companies
- Outsourcing to small producers
- Glocalisation