Interaction of Geopolitics and FDI

Imad A. Moosa

Chapter 5 in Understanding the Geopolitics of Foreign Direct Investment, 2026, pp 110-147 from Edward Elgar Publishing

Abstract: FDI is determined by a large number of economic, financial and technological factors, well as political stability and policy-related factors. These factors, however, cannot explain why some countries as hardly receive any FDI flows or experience a sudden redirection of these flows. A potential explanatory factor for these observations is geopolitics, as FDI flows are increasingly mirroring the world's geopolitical divides. This is sometimes known as the fragmentation of FDI, which is driven by geopolitical fragmentation. Interaction between geopolitics and FDI is bidirectional, because geopolitics affects FDI while FDI enhances geopolitical power.

Keywords: Geopolitical fragmentation; Geopolitical alignment; Onshoring; Friend-shoring; Reshoring; Tariff-jumping FDI (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035361526
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