Investigating the Structure and Policy Implications of the Global FDI Network

Samani Habib Ansari, Pour Afrooz Sadat Foroughi, Zare Mohammad Hassan and Shabani Zahra Dehghan
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Samani Habib Ansari: Yazd University
Pour Afrooz Sadat Foroughi: Yazd University
Zare Mohammad Hassan: Yazd University
Shabani Zahra Dehghan: Shiraz University

Journal of Economic Integration, 2026, vol. 41, issue 2, 429-466

Abstract: Foreign direct investment (FDI) plays a vital role in financing projects and generating spillover effects such as technology transfer and human capital development. This study analyzes FDI interactions among 193 countries from 2011 to 2021 by constructing inward and outward FDI networks. Using clustering coefficients, centrality measures, and community detection, the research examines the structural features of these networks. Results show that the United States, the United Kingdom, Luxembourg, and the Netherlands consistently hold central positions. Over time, the number of communities decreased while their size increased, with key FDI countries placed in the same community. Employing the GMM method, the study identifies significant determinants of network positions: trade openness, free-trade agreements, and GDP positively affect both inflow and outflow networks. Inward positions are further strengthened by good governance but weakened by inflation. Conversely, in outward networks, inflation boosts FDI, while governance has a negative impact.

Keywords: Network Theory; Foreign Direct Investment; Modularity; Communities; GMM (search for similar items in EconPapers)
JEL-codes: B55 D85 E22 F21 F41 F65 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:022614

DOI: 10.11130/jei.2025028

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