The Global FDI Network: Searching for Ultimate Investors

November 17, 2017

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Jannick Damgaard, and Thomas Elkjaer. The Global FDI Network: Searching for Ultimate Investors, (USA: International Monetary Fund, 2017) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

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.

Subject: Asset and liability management, Balance of payments, Financial services, Foreign direct investment, Offshore financial centers, Special purpose vehicle

Keywords: FDI, FDI data, FDI equity, FDI estimate, FDI intensity, FDI network, FDI position, Financial globalization, Foreign direct investment, Global, Inward FDI, Multinational enterprises, OECD country, Offshore financial centers, Special purpose entities, Special purpose vehicle, Valuation method, WP

Publication Details

Pages:

25
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2017/258
Stock No:

WPIEA2017258
ISBN:

9781484329658
ISSN:

1018-5941

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