The Global FDI Network: Searching for Ultimate Investors

Jannick Damgaard and Thomas Elkjaer

No 2017/258, IMF Working Papers from International Monetary Fund

Abstract: This paper addresses three types of geographical decoupling in foreign direct investment (FDI), i.e., challenges when using traditional FDI data as a proxy for real economic integration between economies: (i) large bilateral asymmetries between inward and outward FDI, (ii) the role of special purpose entities (SPEs), and (iii) the effect of moving from immediate counterpart to ultimate investing economy (UIE). A unique global FDI network is estimated, where SPEs are removed and FDI positions are broken down by the UIE. Total inward FDI in the new network is reduced by one-third, and financial centers are less dominant.

Keywords: WP; FDI position; FDI network; inward FDI; FDI estimate; FDI intensity; OECD country; FDI; multinational enterprises; special purpose entities; financial globalization; valuation method; FDI data; FDI equity; Foreign direct investment; Special purpose vehicle; Offshore financial centers; Global (search for similar items in EconPapers)
Pages: 25
Date: 2017-11-17
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