Foreign direct investment increased globally mainly due to the large capital inflows into the former Eastern bloc countries such as China and those in the former Soviet Union and in East Europe. Also, the establishment of the World Trade Organization (WTO) in 1995 strengthened the institutional framework of free trade.
Over this period, many multinational companies, which already had hubs in various regions, evolved their production systems even more. They segmented the process, from planning and development of products to the production of parts, assembly, and sales.