Final answer:
The efficiency view of FDI suggests that reallocating resources to capitalize on comparative advantages leads to increased global economic efficiency. Companies like Dell move operations to countries like Mexico to benefit from lower labor costs, which can improve corporate profits and reduce consumer prices.
Step-by-step explanation:
The ______ view of FDI states that overall efficiency of resource utilization increases in the world economy. The keyword that fills in the blank here is likely meant to be "efficiency" as it reflects the benefits of reallocating resources, like labor, to locations where they can be utilized more productively according to their comparative advantage. For example, if Dell has moved its assembly operations to Mexico to take advantage of lower labor costs, this strategic decision supports the efficiency view of Foreign Direct Investment (FDI), suggesting that such a shift in operations leads to an increase in overall world economic efficiency.
By placing assembly plants in locations with cheaper labor costs, such as the maquiladoras in Mexico, corporations can maximize their profits and reduce product costs. This not only inflates corporate profits but also potentially reduces costs for consumers, thereby improving global assembly line processes and efficiency.
The decision to relocate manufacturing is influenced by various factors including labor costs, proximity to suppliers and customers, environmental regulations, and transportation quality. When companies move part of their production to another country, it's often aimed at focusing on their area of comparative advantage - in the case of the United States, for instance, this could mean relocating labor-intensive jobs to countries like Mexico, while increasing productivity in sectors where the U.S. has a productivity advantage.