This paper aims to study the choice of optimal global production modes made by multinationals in the presence of asymmetric information. In particular, we focus on two types of asymmetric information, namely hidden characteristic and hidden action. The former creates adverse selection problem, and the later leads to moral hazard problem, both of which potential incur non-trivial costs to multinationals. We argue that different global production modes, including green field foreign direct investment, joint venture, and of shore outsourcing, can serve as a means to overcome or mitigate the costs arising from certain or both types of asymmetric information. We study the conditions under which one particular type of off shore production modes is likely to emerge. The implications generated by the model also help to shed light on the explanation for trend and variation of the prevalence of different global business models over time, and across industries and countries.