GLOBAL INVESTMENT TRENDS AND PROSPECTS
Global trends
In 2020, global foreign direct investment (FDI) flows experienced a significant decline of 35%, dropping to $1 trillion from $1.5 trillion in 2019, marking the lowest level since 2005 and nearly 20% below the 2009 low following the global financial crisis The COVID-19 pandemic prompted worldwide lockdowns that hindered existing investment projects, while the looming threat of recession caused multinational enterprises (MNEs) to reevaluate new initiatives This decline in FDI was notably sharper than the decreases observed in gross domestic product (GDP) and trade.
Foreign Direct Investment (FDI) saw a significant decline of 58% in both developed and transition economies, while developing economies experienced a more moderate decrease of 8% This resilience in developing regions, particularly in Asia where FDI increased by 4%, led to them representing two-thirds of global FDI, a notable rise from just under half in 2019.
The significant decline in developed economies, alongside a robust performance in Asia, was largely influenced by fluctuations in a few conduit economies Notably, the Netherlands accounted for nearly one-third of the global decline of approximately $500 billion, primarily due to the liquidation of major holding companies and corporate restructuring Conversely, Asia experienced a boost in foreign direct investment (FDI), particularly in Hong Kong and China, which saw an increase of $46 billion from the low levels recorded in 2019.
Source: UNCTAD, FDI/MNE database (www.unctad.org/fdistatistics).
FDI inflows, global and by group of economies, 2007–2020 (Billions of dollars and per cent)
Chapter I Global Investment Trends and Prospects 3 largely reflecting financial transactions by Chinese MNEs Excluding the effects of conduit flows, one-off transactions and intrafirm financial flows, the global decline was slightly more moderate (about 25 per cent) and uniform (with flows to developing Asia down 6 per cent) 1
Recent trends in greenfield investment announcements and international project finance deals reveal a significant disparity between developing and developed economies In developing countries, greenfield investments dropped by 44% in value, while international project finance deals plummeted by 53% In contrast, developed nations experienced more moderate declines of 16% and 28%, respectively These investment forms are vital for enhancing productive capacity and infrastructure, which are essential for fostering a sustainable recovery.
The simultaneous occurrence of supply and demand shocks has led to significant repercussions, notably a decline in project activity, including greenfield investments, project financing, and cross-border mergers and acquisitions (M&As) This downturn has caused a substantial decrease in new equity flows.
I.2) Intracompany loans were negative in many countries because of changes in financial positions within MNEs in response to the crisis Lower earnings also affected reinvestment; the profits of the largest MNEs plunged by 36 per cent on average Although reinvested earnings declined by only 7 per cent overall, in many large host countries they declined significantly For example, reinvested earnings of foreign affiliates in the United States fell by 44 per cent In other countries with significant investment in commodity-related industries, reinvested earnings suffered from the combined effects of the pandemic and the plummeting oil prices early in the year
The impact of the pandemic on global investment trends was immediate and concentrated in the
Table I.1 Announced greenfi eld projects, cross-border M&As and international project fi nance deals, by group of economies, 2019–2020
Group of economies Type of FDI
(Billions of dollars) Growth rate Number Growth rate
According to data from UNCTAD's cross-border M&A database, along with information from the Financial Times Ltd and fDi Markets regarding announced greenfield FDI projects, as well as Refinitiv SA for international project finance deals, a comprehensive overview of the current landscape of mergers and acquisitions, foreign direct investments, and project financing is provided.
Source: UNCTAD, FDI/MNE database (www.unctad.org/fdistatistics).
Global FDI inflows, by components,
2019 and 2020 (Billions of dollars and per cent)
4 World Investment Report 2021 Investing in Sustainable Recovery
According to data from UNCTAD's cross-border M&A database, as well as information from the Financial Times Ltd and fDi Markets for announced greenfield FDI projects, and Refinitiv SA for international project finance deals, a comprehensive overview of mergers and acquisitions, foreign direct investment, and project financing can be obtained.
-29% -13% -5% a Greenfield projects b Cross-border M&As c International project finance deals
Announced greenfield projects, cross-border M&As and international project finance deals,
2019 Q1–2021 Q1 Figure I.3. first half of 2020 In the second half, cross-border M&As and international project finance deals partly recovered (although the recovery was concentrated in developed economies)
In contrast, greenfield investment continued its negative trend throughout 2020 and into the first quarter of 2021 (figure I.3).
Trends by geography
Foreign Direct Investment (FDI) flows to developed economies experienced a significant decline of 58%, dropping to $312 billion This decrease was largely influenced by substantial fluctuations in conduit and intrafirm financial flows, as well as corporate reconfigurations Additionally, net cross-border mergers and acquisitions (M&A) sales, which typically represent the most critical type of FDI in these regions, fell by 11%.
$379 billion The values of announced greenfield investments and cross-border project finance deals declined by 16 per cent and 28 per cent, respectively.
In Europe, aggregate foreign direct investment (FDI) inflows have drastically decreased by 80%, totaling just $73 billion Notably, countries with significant conduit flows, including the Netherlands and Switzerland, experienced declines, while major economies like the United Kingdom, France, and Germany saw FDI drop by 57%, 47%, and 34%, respectively Overall, FDI to the European Union fell by 73% to $103 billion Similarly, the United States witnessed a 40% decrease in FDI inflows, amounting to $156 billion, primarily due to a reduction in reinvested earnings Despite this decline, the U.S remains the largest recipient of FDI, closely followed by China.
Latin America and the Caribbean
FDI inflows, by region, 2019 and 2020
(Billions of dollars and per cent)
Source: UNCTAD, FDI/MNE database (www.unctad.org/fdistatistics)
Chapter I Global Investment Trends and Prospects 5
New equity inflows also fell, mirroring drops in both greenfield investment and cross-border
M&As Elsewhere, flows to Australia halved and those to Japan decreased by 30 per cent
FDI flows to developing economies decreased less steeply, by 8 per cent to $663 billion
FDI flows to China rose by 6 per cent to $149 billion, mainly because of resilient economic growth, investment facilitation efforts and continuing investment liberalization
Developing Asia remains the largest recipient of foreign direct investment (FDI), capturing over half of the global total with a rise to $535 billion, reflecting a 4 percent increase However, when excluding significant conduit flows to Hong Kong, China, FDI to the region experienced a decline of 6 percent.
FDI in South-East Asia – normally an engine of growth for global FDI – contracted by 25 per cent to $136 billion, with declines in investment in all the largest recipients, including
Singapore, Indonesia, and Viet Nam experienced notable declines in foreign direct investment (FDI) by 21%, 22%, and 2% respectively Meanwhile, the recently signed Regional Comprehensive Economic Partnership (RCEP) has emerged as a significant group for FDI recipients In contrast, India saw an increase in FDI, primarily driven by acquisitions in the information and communication technology (ICT) sector, positioning it as the fifth largest FDI recipient globally.
Source: UNCTAD, FDI/MNE database (www.unctad.org/fdistatistics).
FDI inflows, top 20 host economies, 2019 and 2020 (Billions of dollars)
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Foreign Direct Investment (FDI) in Latin America and the Caribbean, Africa, and transition economies experienced a significant decline due to the pandemic's impact on export demand and a sharp drop in commodity prices In Latin America and the Caribbean, FDI fell by 45% to $88 billion, marking the steepest decline among developing regions, with Brazil, Colombia, Chile, and Peru seeing substantial drops, while Mexico's FDI decreased by 15% to $29 billion Africa's FDI inflows decreased by 16% to $40 billion, reaching a level not seen in 15 years, with Egypt remaining the largest recipient Transition economies faced an even more drastic reduction, as FDI flows shrank by 58% in 2020.
Foreign direct investment (FDI) inflows in the Russian Federation, the largest economy among transition economies, experienced a dramatic decline from $32 billion in 2019 to just $10 billion This drop highlights the country's heavy reliance on investments in the extractive industry.
In 2020, multinational enterprises (MNEs) from developed economies significantly decreased their foreign investments by 56%, totaling $347 billion This decline led to a historic low in their share of global outward foreign direct investment (FDI), which fell to 47% The reduction in investment from major investor economies was further intensified by considerable volatility in conduit flows.
Aggregate outward investment by European MNEs (including large negative flows) fell by
In 2023, foreign direct investment (FDI) outflows reached $74 billion, marking an 80% decline and the lowest level since 1987, primarily due to significant reductions from the Netherlands, Germany, Ireland, and the United Kingdom The Netherlands experienced a staggering drop of $246 billion in outflows to -$161 billion, attributed to corporate restructuring and holding-company liquidations Although German multinational enterprises (MNEs) made notable acquisitions abroad, a $55 billion reduction in loans led to a 75% decrease in FDI outflows The United Kingdom saw its outflows fall from -$6 billion to -$33 billion, driven by substantial negative reinvested earnings and asset divestitures, such as Tesco's $9.9 billion sale of its Thai stores and Vodafone's $5.8 billion disposal of its tower assets in Italy.
2019–2020 change (%) Share in world FDI inflows (%)
FDI inflows in selected groups, 2019 and 2020
(Billions of dollars and per cent)
Source: UNCTAD, FDI/MNE database (www.unctad.org/fdistatistics).
Note: G20 includes only the 19 member countries (excluding the European Union); AfCFTA = African Continental Free Trade Area;
BRICS = Brazil, Russian Federation, India, China and South Africa; CPTPP = Comprehensive and Progressive Agreement for Trans-PacificPartnership; RCEP = Regional Comprehensive Economic Partnership; USMCA = United States–Mexico–Canada Agreement
Chapter I Global Investment Trends and Prospects 7
Outflows from the United States remained flat at $93 billion An increase in flows to Europe was offset by reduced investment in Asia, mainly in Singapore Investment by Japanese
MNEs – the largest outward investors in the last two years – dropped by half to $116 billion, as large M&A purchases were not repeated in 2020
Investment activity abroad by multinational enterprises (MNEs) from developing economies fell by 7% to $387 billion, with a more significant decline of 22% when excluding Hong Kong, China Despite a slight 3% decrease, China's outward foreign direct investment (FDI) remained substantial at $133 billion, solidifying its position as the world's largest investor Additionally, cross-border mergers and acquisitions (M&A) by Chinese MNEs saw a remarkable doubling in value, largely driven by financial transactions in Hong Kong The ongoing expansion of the Belt and Road Initiative further underscores China's active investment strategy.
Source: UNCTAD, FDI/MNE database (www.unctad.org/fdistatistics).
China (3) Luxembourg (11) Japan (1) Hong Kong, China (7) United States (4) Canada (6) France (9) Germany (2) Korea, Republic of (10) Singapore (8) Sweden (18) Spain (16) United Arab Emirates (13)
Thailand (28) Taiwan Province of China (21)
FDI outflows, top 20 home economies, 2019 and 2020 (Billions of dollars)
The World Investment Report 2021 highlights that despite the pandemic, foreign direct investment (FDI) outflows remained resilient, with South-East Asia experiencing a 16% decline to $61 billion Notably, Singapore's FDI outflows fell by 36% to $32 billion, primarily directing investments to other ASEAN nations Conversely, Thailand saw its outward FDI more than double to $17 billion, largely focused on financial services and manufacturing in neighboring countries, exemplified by Bangkok Bank's acquisition of Bank Permata in Indonesia for $2.3 billion.
In 2020, Latin American multinational enterprises (MNEs) experienced an unprecedented collapse in outward investment, resulting in a disinvestment of -$3.5 billion, a significant decline of approximately $50 billion This downturn was primarily driven by substantial negative outflows from Brazil, totaling -$26 billion, as MNEs sought to raise funds through their international subsidiaries Additionally, Mexico saw a 41 percent reduction in outward foreign direct investment (FDI) Conversely, Chilean MNEs increased their overseas investments, with outflows rising by 25 percent to $12 billion, as they extended loans to their foreign affiliates.
In 2020, foreign direct investment (FDI) outflows from transition economies plummeted by 76%, totaling only $6 billion This significant decline was primarily due to a sharp reduction in overseas investments by Russian multinational enterprises (MNEs) in the extractive industries, which saw a staggering 83% decrease in reinvested earnings.
Trends by type and sector
The pandemic significantly impacted foreign direct investment (FDI) in 2020, leading to declines across all regions and industries Greenfield project announcements fell by 33% in volume and 29% in number, while international project finance volumes decreased by 42%, although the number of project finance deals only saw a slight decline of 5% Additionally, the value of net cross-border mergers and acquisitions (M&As) dropped by 6%, with the number of deals declining by 13% However, a notable surge in the last quarter of 2020 largely offset the sharp declines experienced in the first half of the year.
According to data from UNCTAD's cross-border M&A database, along with insights from Financial Times Ltd and fDi Markets regarding announced greenfield FDI projects, as well as information from Refinitiv SA on international project finance deals, a comprehensive overview of global investment trends can be established.
Greenfield projects Cross-border M&As International project finance deals a Value b Number
Figure I.8 Announced greenfield projects, cross-border M&As and international project finance deals,
2011–2020 (Billions of dollars and number)
Chapter I Global Investment Trends and Prospects 9 a Greenfield investment trends
The value of announced greenfield investment projects fell to $564 billion in 2020 (table
I.2), the lowest level ever recorded The geographical focus of foreign investors shifted to developed economies Consequently, developing countries faced an unprecedented downturn in greenfield FDI projects
The significance of the primary sector is diminishing, with the total value of announced greenfield projects dropping to $11 billion, accounting for under 2% of the overall total Notably, over half of this value is attributed to a single $6.4 billion oil and gas extraction project in Australia, announced by Royal Dutch Shell.
The decline in greenfield project announcements was particularly significant in the manufacturing sector, while the services sector, which accounted for 50% of the global greenfield project value in 2019, experienced a milder impact.
Greenfield investments in energy generation and distribution fell by 13% to $99 billion, with foreign investors favoring renewable energy projects over fossil fuels Despite the global economic downturn, renewable energy projects demonstrated resilience, experiencing only a 5% decline in value to $88 billion across 507 initiatives Notably, all but one of the top ten highest-value energy projects announced by foreign investors in 2020 were centered on renewable energy.
The pandemic significantly increased global demand for digital infrastructure and services, resulting in a 22% rise in greenfield FDI project announcements within the ICT industry, totaling $81 billion Despite a 13% decline in the number of announced projects, the ICT sector captured the largest share Notable investments included Telefónica's $6 billion project to develop a fibre-optic network in Germany, Amazon's $2.8 billion commitment to ICT infrastructure in India, and Alphabet's $1.8 billion investment in the same sector.
Table I.2 Announced greenfi eld projects, by sector and selected industries, 2019–2020
(Billions of dollars) Growth rate Number Growth rate
Top 10 industries in value terms
Coke and refi ned petroleum 94 30 -69 109 54 -50
Source: UNCTAD, based on information from the Financial Times Ltd, fDi Markets (www.fDimarkets.com).
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Greenfield project announcements in the manufacturing sector experienced a significant decline of 41%, totaling $237 billion This trend was particularly evident in developing economies, where investments crucial for industrial growth dropped by 42% to $129 billion The majority of manufacturing projects continued to be concentrated in Asia, accounting for $101 billion of the total investment.
The energy price shock in early 2020 significantly impacted resource-based processing industries, resulting in a 50% decrease in investment announcements for coke and refined petroleum, with the total value of announced projects dropping by one-third to $30 billion Despite this downturn, notable large-scale projects emerged, including a major investment of over $13 billion by Hengyi Group from China to establish a refinery and petrochemical complex in Brunei Darussalam.
The automotive and chemical industries experienced a nearly 50% reduction in new project launches globally Despite this downturn, developing countries saw a slight increase in project values, largely due to substantial investments in basic chemicals The overall decline in manufacturing investment values was somewhat offset by major projects in semiconductors and transport equipment batteries Notably, TSMC from Taiwan announced a $12 billion investment in a U.S chip factory, while various battery investment announcements further contributed to this trend.
$5.1 billion by Contemporary Amperex Technology (China) in Indonesia, $2.3 billion by Honeycomb Energy Technology (China) in Germany and $2.2 billion by Groupe PSA (France), also in Germany
Natural resources-related industries Lower-skill industries Higher-skill industries
Source: UNCTAD, based on information from the Financial Times Ltd, fDi Markets (www.fDimarkets.com).
Note: Natural resources-related industries include (i) coke, petroleum products and nuclear fuel; (ii) metals and metal products;
Non-metallic mineral products and wood and wood products are categorized under lower-skill industries, which also include food, beverages, tobacco, textiles, clothing, and leather In contrast, all other manufacturing sectors fall under higher-skill industries.
Latin America and the Caribbean
Figure I.9 Developing economies: announced FDI greenfield projects in manufacturing by value (Billions of dollars and per cent)
Table I.3 Announced international project fi nance deals, selected industries, 2019–2020
(Billions of dollars) Growth rate Number Growth rate
Source: UNCTAD, based on data from Refinitiv SA.
Chapter I Global Investment Trends and Prospects 11 b International project finance trends
International project finance activity demonstrated relative resilience during the crisis, with a mere 5% decline in new projects, thanks to the continued growth of renewable energy projects, which accounted for over half of project finance deals Despite this, the pandemic had a more pronounced impact on international deals compared to domestically-led projects, resulting in stable overall project finance activity However, increased risk aversion among international sponsors, who typically lead the largest projects, led to a significant 42% decline in total project values, reaching $367 billion.
(table I.3) – the lowest level since 2003
In the oil and gas industry, international project finance announcements plummeted by 78% in value and 16% in number compared to 2019 Notably, Asia experienced the most significant decline among developing regions, with announced investments dropping from $68 billion to $17 billion, despite a 20% increase in the number of deals.
Most project finance is primarily directed towards infrastructure, encompassing transport, power generation, and utilities The recovery from the pandemic, along with stimulus packages in developed regions focusing on infrastructure, is anticipated to enhance international project finance In 2020, infrastructure project finance saw a notable increase in telecommunications (62 percent), while experiencing significant declines in key sectors such as energy (-28 percent) and transport.
Energy infrastructure project values have dropped to their lowest level in eight years, declining by 40% to $27 billion Notably, Asia stands out as the only region experiencing growth in both the number and value of projects Among the significant announcements in Vietnam are a $5 billion gas-fired power plant proposed by ExxonMobil and a $2.2 billion coal-fired power plant developed by Thai multinational enterprises in the Quang Tri Economic Zone.
The pandemic significantly boosted telecommunication investment due to accelerated digital adoption; however, this surge was not mirrored in project finance announcements for ICT infrastructure in developing nations Notably, the value of these announcements plummeted from $57 billion in 2019 to under $7 billion, with the 2019 figure largely inflated by a single major megaproject.
Table I.3 Announced international project fi nance deals, selected industries, 2019–2020
(Billions of dollars) Growth rate Number Growth rate
Source: UNCTAD, based on data from Refinitiv SA.
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SDG investment trends in developing economies
The pandemic has intensified the investment gap for Sustainable Development Goals (SDGs), especially in least developed countries (LDCs) and structurally weak economies Greenfield investments relevant to SDGs in developing regions have decreased by 33% compared to pre-pandemic levels, while international project finance has plummeted by 42% This decline is significantly more pronounced in developing countries than in their developed counterparts In contrast, developed economies are experiencing increased investments in renewable energy and digital infrastructure, highlighting the unequal impact of public support measures on global investment trends.
Recent trends in Sustainable Development Goal (SDG) investment indicate a decline in foreign investment, which threatens to undermine the progress made in promoting SDG initiatives This downturn poses significant risks to the successful implementation of the 2030 Agenda for Sustainable Development and jeopardizes ongoing post-pandemic recovery efforts.
Greenfield and project finance investment activity fell markedly, with all but one of the
SDG investment sectors (renewable energy) registering double-digit declines from the pre-COVID level (table I.5)
Table I.5 The pandemic impact on investment in SDGs: announced greenfi eld and project fi nance, change in value, 2019–2020 (Per cent)
Transport infrastructure, power generation and distribution
-54 Health Investment in health infrastructure, e.g new hospitals
Installations for renewable energy generation, all sources -8 Food and agriculture
Investment in agriculture, research, rural development -49
Provision of water and sanitation to industry and households
-67 Education Infrastructural investment, e.g new schools -35
14 World Investment Report 2021 Investing in Sustainable Recovery a Greenfield investment
In developing and transition economies, the positive growth seen in the pre-pandemic period was largely reversed by the COVID-19 crisis, with the exception of the telecommunication sector Between 2015 and 2019, greenfield projects had been increasing at an annual rate of 4%, primarily driven by advancements in transport, telecommunications, water, sanitation, and education However, the pandemic exacerbated existing challenges in sectors that were already facing difficulties, including power, food and agriculture, and health.
The decline in greenfield project value in least developed countries (LDCs) was less severe, yet its implications could be more harmful compared to other developing nations Notably, greenfield investment in the critical food and agriculture sector, including processing industries, plummeted by 91% This sharp decline heightens concerns about the economic stability of the world's poorest nations and underscores the urgent need to mobilize investments for essential services and infrastructure.
Table I.6 Announced greenfi eld projects in SDG sectors
(Millions of dollars and per cent)
Developing and transition economies LDCs
Water, sanitation and hygiene (WASH)
Source: UNCTAD, based on Financial Times Ltd, fDi Markets (www.fdimarkets.com). a Compound annual growth rate (CAGR) for 2015–2019 b Changes from 2019 to 2020. c Excluding renewable energy d Including information services activities.
Chapter I Global Investment Trends and Prospects 15 b Project finance
The health crisis significantly impacted international project finance in developing and transition economies, leading to a 42% decline in the value and a 14% decrease in the number of cross-border project finance deals aimed at sustainable development goals (SDGs) compared to 2019, mirroring the downturn in greenfield investment.
In Least Developed Countries (LDCs), project finance value increased by 27%, despite a 22% decline in the number of projects This rise in investment is primarily attributed to significant transport infrastructure projects, including Zambia's $11 billion Standard Gauge Railway, Senegal's $1.1 billion Ndyane Port Project, and renewable energy initiatives such as Ethiopia's $10 billion Lotus Energy Solar and Uganda's $1.4 billion Ayago Project.
As the investment gaps widen, the outlook for meeting the SDGs becomes more uncertain
Before the pandemic, investment in Sustainable Development Goals (SDGs) was already falling behind With under a decade remaining to meet the UN’s 2030 Agenda for Sustainable Development, it is essential to foster renewed commitment from all stakeholders and utilize a mix of public and private financing to not only regain the pre-pandemic growth trajectory but also to advance towards achieving these critical goals.
Table I.6 Announced greenfi eld projects in SDG sectors
(Millions of dollars and per cent)
Developing and transition economies LDCs
Water, sanitation and hygiene (WASH)
Source: UNCTAD, based on Financial Times Ltd, fDi Markets (www.fdimarkets.com). a Compound annual growth rate (CAGR) for 2015–2019 b Changes from 2019 to 2020. c Excluding renewable energy d Including information services activities.
Table I.7 Announced international project fi nance deals in SDG sectors
(Millions of dollars and per cent)
Developing and transition economies LDCs
Water, sanitation and hygiene (WASH)
Source: UNCTAD, based on Refi nitiv. a Compound annual growth rate (CAGR) for 2015–2019. b Changes from 2019 to 2020.
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Global prospects
Global Foreign Direct Investment (FDI) flows are anticipated to reach their lowest point in 2021, with a projected recovery of 10–15% However, this recovery would still leave FDI approximately 25% below 2019 levels and over 40% lower than the peak experienced in 2016 Forecasts for 2022 indicate a potential further increase, with the upper projections suggesting that FDI could return to the 2019 level of $1.5 trillion.
The anticipated modest recovery in global Foreign Direct Investment (FDI) for 2021 is influenced by ongoing uncertainties regarding vaccine access, new virus variants, and slow economic sector reopenings Historically, FDI lags behind other economic indicators following a crisis, suggesting that a full recovery to pre-pandemic levels will take time Although multinational enterprises (MNEs) are expected to increase capital expenditures due to high cash reserves and delayed spending plans, this surge in investment will not immediately lead to a swift FDI rebound This is evident in the stark difference between optimistic capital expenditure forecasts and the continued decline in greenfield project announcements.
The recovery of Foreign Direct Investment (FDI) is anticipated to be uneven, with developed economies leading global growth due to robust cross-border mergers and acquisitions (M&A) and significant public investment Asia is expected to maintain resilient FDI inflows, continuing to be a favored destination for international investment throughout the pandemic.
Figure I.10 Global FDI inflows, 2015–2020 and 2021–2022 forecast
Chapter I Global Investment Trends and Prospects 17
A significant rebound in foreign direct investment (FDI) in Africa and Latin America and the Caribbean is improbable in the near future due to existing structural weaknesses and limited fiscal capacity Additionally, these regions heavily rely on greenfield investments, which are anticipated to remain subdued throughout 2021.
In early 2021, foreign direct investment (FDI) projects revealed contrasting trends between cross-border mergers and acquisitions (M&As) and greenfield investments Following a full recovery in the latter half of 2020, cross-border M&A activity remained stable in the first quarter of 2021, with both the number and value of newly announced deals increasing, indicating a potential rise in M&A activity later in the year In contrast, greenfield investments have yet to show signs of recovery, remaining weak after a significant decline in 2020.
The modest growth forecast for 2021 – to about $1.1–1.2 trillion – would still put global
Foreign Direct Investment (FDI) flows have slightly exceeded last year's projections, aligning with the forecasted decline of 35% for 2020 This upward revision is driven by various factors, including the ongoing deployment of vaccines, which is enabling countries to gradually lift restrictions as the year progresses.
In 2021, household excess savings and pent-up consumer demand are projected to fuel economic growth, particularly in wealthier nations This growth is expected to boost trade in goods and elevate commodity prices Consequently, the anticipated economic upturn is likely to enhance corporate profitability, positively impacting the reinvested earnings aspect of foreign direct investment (FDI).
Governments in developed nations and higher-income emerging markets have implemented substantial fiscal stimulus programs in response to the COVID-19 crisis, primarily through financial assistance to struggling households and businesses As these measures begin to taper off, both the economic landscape and recovery strategies will need careful consideration.
European Union and the United States have pushed forward public investment strategies
Implementing these measures is expected to enhance foreign direct investment (FDI), especially in infrastructure, green, and digital economy sectors Furthermore, low borrowing costs and robust global financial markets are driving an increase in cross-border mergers and acquisitions (M&A) Additionally, the reduction of immediate fiscal support may result in a rise in M&A activity as distressed companies look for buyout opportunities.
Recent data indicates that global output and trade showed greater resilience than anticipated in 2020, leading to an improved outlook for 2021 The estimated contraction of the global economy for 2020 is now projected at -3.3 percent, which is approximately one percentage point less than the earlier forecast provided by the International Monetary Fund (IMF) in October 2020.
2021 (from April) has been increased by 0.8 percentage points relative to the forecast of
In October 2020, the World Trade Organization revised its 2021 projection for global merchandise trade volume upwards by 0.8 percentage points, reflecting better-than-expected results from 2020 As a result, there is an optimistic outlook that trade will return to pre-crisis levels by the end of 2021.
Projections indicate that Foreign Direct Investment (FDI) is set to rise by 15-20% in 2022, potentially reaching $1.4 trillion This suggests a significant recovery in FDI by the end of 2022, assuming ongoing improvements in health and economic conditions In a highly optimistic scenario, FDI could rebound to its pre-pandemic level of approximately $1.5 trillion if no further crises occur and investor confidence remains high Conversely, a lower-bound scenario anticipates a prolonged downturn, with FDI stabilizing at around $1.2 trillion during 2021 and 2022, without any further contractions.
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The full recovery of Foreign Direct Investment (FDI) to pre-pandemic levels is uncertain, as the pandemic may drive a shift towards enhanced supply-chain resilience and increased policy demands for national or regional self-sufficiency Emerging tighter restrictions on international trade and investment, coupled with a potential rebalancing of global supply chains towards more localized operations, could create enduring downward pressure on global FDI, possibly influenced by policy incentives.
Regional prospects
Looking at regional contributions to global FDI growth, the improvement projected for 2021 is driven by developed economies and by East and South-East Asia
In various regions, the outlook remains uncertain due to several factors, including restricted vaccine access, constrained fiscal capacity for investment stimulation, heightened economic unpredictability, and a tendency for international investors to adopt a more cautious approach following significant disruptions.
Foreign Direct Investment (FDI) in Africa is expected to rise by 5%, yet it will still be 15% lower than pre-2019 levels Despite a recovery in commodity prices after a decline in 2020, the region's growth remains subdued due to limited fiscal and monetary resources and a shortage of vaccines However, the region's substantial potential and investment requirements are likely to boost FDI inflows in the medium term, particularly if the investment climate improves The African Continental Free Trade Agreement (AfCFTA) aims to reduce barriers to intraregional trade, which could further enhance FDI opportunities in Africa.
In 2021, Foreign Direct Investment (FDI) growth in Asia is projected to increase by 5 to 10 percent year-on-year, with the region demonstrating resilience during the pandemic Factors contributing to this growth include expanding markets, strong regional and global FDI connections, and a generally open investment climate The Regional Comprehensive Economic Partnership, established in November 2020, is expected to enhance regional investment ties Additionally, Southeast Asia's export-driven manufacturing sector is poised to benefit from a recovery in trade and rising global demand, while higher oil prices are likely to stimulate FDI in West Asia However, the recent COVID-19 resurgence in India highlights ongoing uncertainties, particularly affecting South Asia's economic outlook A broader resurgence of the virus across Asia could significantly impact global FDI levels in 2021, given the region's substantial contribution to the total.
Table I.8 FDI infl ows: annual growth, 2018–2020 and 2021 forecast (Per cent)
Latin America and the Caribbean -4 7 -45 -5 to 5 0
According to the UNCTAD forecasting model, the predictions for foreign direct investment (FDI) trends exclude the impacts of conduits, one-off transactions, and intrafirm financial flows As a result, the growth rates for 2020 presented in this table differ from the actual rates reported elsewhere in the document.
Chapter I Global Investment Trends and Prospects 19
China continues to be a key driver of foreign direct investment (FDI) in the region, as multinational enterprises (MNEs) view it as a vital strategic market despite geopolitical and commercial uncertainties The country's increasing purchasing power, robust infrastructure, and favorable investment environment further attract significant investments While some MNEs are reshoring or diversifying their operations due to rising labor costs and the need for improved supply-chain resilience, the ongoing influx of market-seeking FDI, especially in technology and services sectors, mitigates any decline in efficiency-seeking investments This trend particularly benefits South-East Asia, enhancing its economic landscape.
FDI in Latin America and the Caribbean is projected to stabilize at 2020 levels, following a major contraction of 45 per cent in 2020 Latin America is severely affected by the
The COVID-19 crisis has significantly impacted the region, with recovery efforts expected to be slower compared to others In the United States, fiscal stimulus measures are anticipated to boost the broader area through increased trade and remittances However, the prevailing policy uncertainty, particularly with general elections set for 2021, poses challenges to sustained recovery.
2022 in several major FDI recipient economies (including Chile, Colombia and Brazil).
Economic prospects in North America and Europe have improved due to extensive fiscal support and vaccine rollouts in 2021 Foreign Direct Investment (FDI) in Europe is expected to rise by 15 to 20 percent, although it will still be 30 percent below 2019 levels, influenced by fluctuations in financial flows through conduit economies In North America, FDI is also projected to increase by approximately 15 percent, driven by fiscal stimulus measures and rising consumer demand that are set to boost the U.S economy However, short-term uncertainties for international investors may arise from new corporate tax reforms and ongoing trade tensions.
Transition economies reliant on oil and primary commodity revenues stand to gain from rising prices However, foreign direct investment (FDI) in this region has been weak, contracting by 58% in 2020 due to economic sanctions on the Russian Federation and low growth prospects Expectations for a recovery in FDI in 2021 remain low, contingent on factors such as the successful rollout of vaccines, a rise in global demand for primary commodities, and a reduction in geopolitical tensions both regionally and internationally.
IPA expectations
Despite the continuation of the pandemic in 2021 and a far from promising immediate investment outlook, investment promotion agencies (IPAs) showed optimism in UNCTAD’s annual survey
In 2021, expectations for foreign direct investment (FDI) inflows are notably high among countries, with many anticipating either an increase or a significant rise following a challenging previous year However, on a global scale, expectations are more cautious, as only 49 percent of respondents predict an increase in global FDI, reflecting the awareness of investment promotion agencies (IPAs) regarding the difficulties in attracting foreign investments.
FDI in the current climate.
No change Increase Significantly increase
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China United States Germany United Kingdom Japan
Figure I.12 IPA expectations: largest investment-source economies,
Figure I.13 IPA expectations: most important industries for investment, 2021
No change Somewhat more important
IPA expectations: role of foreign investment in health-care in the pandemic aftermath
According to recent data, IPAs identify China, the United States, and Germany as the top sources of foreign investment in their countries In 2021, nearly 75% of respondents recognized China as a significant investment source, marking a notable increase from previous years This trend reflects China's growing role as an investor, particularly in infrastructure financing in developing nations Additionally, the United Kingdom and Japan were viewed as likely investing economies by 32% and 20% of IPAs, respectively.
In 2021, agriculture and food emerged as a top priority for foreign direct investment (FDI), particularly among investment promotion agencies (IPAs), with nearly all respondents highlighting its significance in developing and transition economies Additionally, information and communication technology (ICT) ranked as the second most attractive industry for FDI, underscoring the importance of both sectors in driving economic growth and investment opportunities.
A recent survey revealed that 39% of respondents identified the ICT industry as a key sector for investment, highlighting the rapid digitization spurred by the pandemic Additionally, one-third of participants recognized the pharmaceutical industry as increasingly vital for attracting investment, marking a notable rise compared to previous years This shift underscores the growing emphasis on diversification and resilience within industries in response to the challenges posed by the pandemic.
Most respondents anticipate that foreign investment will increasingly influence the healthcare sector, particularly in hospitals, clinics, and the production of medical supplies and pharmaceuticals Several countries have already seen notable investment decisions within their healthcare systems.
Chapter I Global Investment Trends and Prospects 21
No change Moderately increase Singificantly increase
IPA expectations: impact of economic rescue and recovery packages on infrastructure investment (Per cent of respondents)
IPAs have mixed feelings regarding the effects of global economic rescue and recovery packages on foreign investment in their countries' infrastructure Over half of the respondents anticipate an increase in infrastructure investment due to these packages, while 34 percent expect no change, and others foresee a decline.
(6 per cent) (figure I.15) Some countries reported actively adjusting their regulatory environments to attract foreign investment in infrastructure
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Key indicators of international production
Despite a significant drop in global FDI flows during the crisis, international production remains crucial for fostering economic growth and development Overall, FDI flows have stayed positive, contributing to the capital stocks of foreign affiliate networks Key indicators of international production are summarized in Table I.9.
Table I.9 Selected indicators of FDI and international production, 2020 and selected years
Value at current prices (Billions of dollars)
Rate of return on inward FDI b 5.4 8.8 6.3 6.9 6.2 4.7
Rate of return on outward FDI b 7.6 9.5 6.4 6.8 6.3 4.9
Sales of foreign affi liates 7 615 28 444 30 866 33 203
Value-added (product) of foreign affi liates 1 588 6 783 8 244 8 254
Total assets of foreign affi liates 7 305 70 643 114 441 110 220
Employment by foreign affi liates
Royalties and licence fee receipts 31 179 391 427 419 394
The article highlights that the table excludes the sales value of foreign affiliates linked to their parent companies through non-equity relationships, as well as the sales of the parent firms themselves It provides estimates for worldwide sales, gross product, total assets, exports, and employment of foreign affiliates, derived from data of TNCs across various countries, including Australia, Austria, Belgium, Canada, and the United States Specifically, the estimates are based on average shares of these countries in global outward FDI stock over three years Additionally, it notes that data for income on inward and outward FDI was collected from 168 and 142 countries, respectively, covering over 90% of global stocks, with calculations limited to countries with both income and stock data The information is sourced from the IMF (2021a).
Chapter I Global Investment Trends and Prospects 23
Internationalization trends of the largest MNEs
The internationalization levels of the top 100 MNEs stagnated in 2020 (table I.10)
Across various industries, multinational enterprises (MNEs) exhibited significant differences in their international strategies While those in the energy and heavy industry scaled back their foreign operations, sectors like pharmaceuticals and telecommunications actively expanded their global presence Despite facing lower sales, light industries, utilities, automotive, and trading companies maintained a stable international production structure.
In 2020, extractive industries, heavy manufacturing, and construction multinational enterprises (MNEs) experienced a significant decline in foreign sales, averaging over 15% The oil and gas sector was particularly hard hit, with sales plummeting by 30% due to the oil price crash This downturn resulted in a freeze on foreign investments and prompted restructuring and asset divestment initiatives, leading to a reduced international footprint Notably, Royal Dutch Shell divested approximately 15% of its foreign assets, while Equinor and BP each reduced theirs by about 10% ExxonMobil anticipates generating $15 billion from divestments in 2021, primarily from international assets, with projections reaching $25 billion by 2025 Additionally, major energy firms like TC Energy and Repsol scaled back their overseas operations significantly, causing them to fall out of the top 100 rankings.
The pandemic significantly increased the demand for pharmaceuticals and healthcare services, resulting in a 15% revenue growth in the health sector, with foreign markets seeing an even higher increase of 18% This surge in demand has spurred interest in identifying successful smaller companies to aid in the development of innovative new products.
Table I.10 Internationalization statistics of the 100 largest non-fi nancial MNEs, worldwide and from developing and transition economies
(Billions of dollars, thousands of employees and per cent)
100 largest MNEs, global 100 largest MNEs from developing and transition economies
Change (%) Assets (Billions of dollars)
Foreign as share of total (%) 58 54 54 31 31
Foreign as share of total (%) 60 57 56 46 42
Foreign as share of total (%) 53 47 46 37 33
The data pertains to fiscal year results reported from April 1 of the base year to March 31 of the following year Complete data for 2020 regarding the 100 largest multinational enterprises (MNEs) from developing and transition economies is currently unavailable Some results have been revised, while others are preliminary.
The 2021 World Investment Report highlights a significant trend in the pharmaceutical sector, noting a 20% increase in foreign assets for multinational enterprises (MNEs) A notable transaction within this landscape was Novartis's acquisition of The Medicines for $7.4 billion, underscoring the growing importance of international acquisitions in fostering sustainable recovery.
Accelerated digitalization has significantly benefited technology multinational enterprises (MNEs), particularly in the hardware and IT sectors, which experienced a 10% increase in international revenues However, this growth did not translate into a rise in cross-border acquisitions, as regulatory scrutiny and market conditions dampened foreign investments in the latter half of 2020 Notably, major companies like Apple and Intel reduced their foreign assets in China by 20% and over 80%, respectively In contrast, digital tech and delivery services firms such as Alphabet, Tencent, and Amazon saw their foreign revenues soar by an average of two-thirds, with foreign assets increasing nearly 30% by the end of fiscal year 2020 Amazon announced approximately $12 billion in greenfield investments to enhance its logistics and retail network, while Deutsche Post also made significant investments in foreign assets, re-establishing its presence in the top 100 rankings.
The pandemic's impact varied across industries, with some multinational enterprises (MNEs) accelerating foreign activities amid consolidation trends sparked by the crisis Notably, the automotive sector saw the merger of Fiat-Chrysler and Groupe PSA, forming Stellantis In telecommunications, Deutsche Telekom climbed the rankings, while Liberty Global made a comeback in the top 100 after years of absence Concurrently, intense price competition and the necessity for investment in new 5G networks led Vodafone to spin off its tower assets, a strategy other telecom companies are contemplating to enhance agility and monetize expensive infrastructure.
Overseas investment activity among leading developing-country multinational enterprises (MNEs) remained subdued, particularly as many are involved in heavily impacted sectors such as extractives and heavy industry Notably, Tencent, the prominent Chinese tech giant, emerged as the largest investor from emerging markets, making significant acquisitions including a 10 percent stake in Universal Music (United States) for $3.3 billion and a nearly complete acquisition of software publisher Leyou (Hong Kong, China).
In a significant move within the emerging markets, a notable transaction involved State Grid of China acquiring the Chilean electric power distributor Chilquinta for $2.2 billion, announced in mid-2019 This acquisition stands out as one of the few major deals from multinational enterprises in emerging markets, alongside another substantial transaction valued at $1.4 billion.
Over the past five years, the aggregate transnationality index (TNI) has gradually decreased, primarily due to geographical and industry compositional effects, with only a minor contribution from the reversal of internationalization among individual multinational enterprises (MNEs) Notably, the number of MNEs from emerging markets in the global top 100 rose from 8 in 2015 to 15 in 2020, although their lower transnationality levels have negatively impacted overall internationalization levels The entry of significant players like Saudi Aramco in 2019, with a TNI of 15 percent, and State Grid in 2017, with a TNI below 5 percent, has been particularly influential Additionally, the gradual emergence of digital companies such as Amazon, Alphabet, and Tencent within the technology sector has contributed to a decline in the industry's average TNI.
The processes of internationalization reversal are notably gradual, as demonstrated by the restructuring efforts of major companies like ExxonMobil, Airbus, Repsol, and General Motors, which resulted in a decrease of approximately 10 percentage points in their Transnationality Index (TNI).
Chapter I Global Investment Trends and Prospects 25 the last 10 years The effect of last year’s asset sales in extractives and heavy industries, which were at the core of the ranking in the past, only adds to their decline in numbers
(from about 30 in 2010 to 21 last year), accelerating the growing presence in the ranking of
MNEs with a much lighter asset footprint, such as digital and pharmaceuticals companies
The rising significance of intangibles in the global economy is evident in the increasing prominence of technology companies, particularly during the crisis, where their foreign sales share in the total ranking rose by five percentage points to 22%, despite the number of multinational enterprises (MNEs) remaining stable at 13 This growth underscores their capacity to penetrate foreign markets without a proportional increase in foreign assets or productive investments In contrast, the advancement of pharmaceutical companies in this area is more gradual and less noticeable, as their value is heavily reliant on intangibles, while their production processes still depend on tangible assets.
In 2020, multinational enterprises (MNEs) faced declining revenues and earnings but successfully maintained steady cash flow from operations They secured additional financing primarily through increased corporate debt issuance, which doubled during the year While acquisitions decreased and capital expenditures remained stable, cash balances surged as many corporations opted to raise equity capital instead of continuing share buybacks Consequently, the top 5,000 non-financial listed MNEs boosted their cash holdings by over 25%, reaching a total of $8 trillion.
The impact of the crisis varied significantly across industries, exacerbating existing disparities in size and access to credit The tourism and travel sectors experienced a staggering 90% decline in operating cash but managed to increase their debt levels more than tenfold With interest rates at historic lows, investors were inclined to support firms deemed resilient enough to survive the crisis, primarily benefiting the largest multinational enterprises (MNEs) On average, the top 5,000 MNEs doubled their debt issuance, while the top quarter of corporations, based on 2019 revenues, nearly tripled theirs.
Note: TNI averages are unweighted.
TNI tech MNEs Total TNI
Average TNI by region and for tech MNEs, 2010–2020
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State-owned multinational enterprises
In response to the COVID-19 crisis, governments have implemented various measures to support businesses, including rescue packages that may involve acquiring equity stakes in financially distressed companies This could lead to a rise in State-owned enterprises (SOEs) within the economy However, the current impact on the number of State-owned multinational enterprises (SO-MNEs) has been minimal, particularly when compared to the significant increase observed during the global financial crisis a decade ago, due to several factors.
• Bailout programmes have relied mostly on the provision of credit lines, grants and payroll support rather than equity injections
• Bailouts have focused on the worst-affected industries, especially travel and tourism, where firms were already partly State owned (for example, Finnair (Finland), SAS (Denmark–
Sweden) and Emirates (United Arab Emirates)) or were purely domestic companies (such as
Network Rail in the United Kingdom)
• Capital injections may still be ongoing or planned
(for example, the rescue of Liberty Steel in the
United Kingdom or the Eurostar between the
• Injections may come in the form of warrants or convertibles, deferring the possibility of increased state ownership to the future (for example, Southwest and Delta airlines in the
United States, and Air New Zealand).
Source: UNCTAD, based on Refinitiv Update of UNCTAD (2021) Multinational Enterprises and the International Transmission of Gender Policies and Practices, Geneva.
Share of top 5,000 MNEs with a diversity policy, average and by economic group, 2013–2019 (Per cent)
New SO-MNEs Potential new SO-MNEs Already SO-MNEs Not MNEs
Figure I.19 Companies nationalized in response to the COVID-19 crisis, 2020–2021 (Number)
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Except for a few cases in emerging Asian economies (China, Hong Kong (China) and Singapore) all equity injections took place in developed economies, and in particular in Europe
In emerging economies, state-owned airlines such as Singapore Airlines, Cathay Pacific, and China Eastern and Southern airlines received significant capital injections In contrast, developed countries adopted two distinct strategies: the United States and New Zealand favored equity-backed loans and convertible instruments, while European nations opted to acquire equity stakes in various airlines.
The COVID-19 crisis slowed down ongoing privatization programmes owing to elevated uncertainty and lower market demand
Brazil and Viet Nam faced challenges in their privatization programs, with Brazil aiming to reduce its state-owned enterprises (SOEs) from 134 to 12 after launching its initiative in late 2018 However, by 2020, only two privatizations were successfully completed: the sale of La Caixa, a subsidiary of La Caixa Federal, and two subsidiaries of Petrobras In Viet Nam, while 174 SOEs were approved for privatization between 2016 and 2020, the COVID-19 pandemic caused significant delays for companies such as MobiFone, Agribank, Northern Food, Vinacomin, and the Vietnam National Chemical Group.
In 2020, the number of state-owned multinational enterprises (SO-MNEs) rose by 7% compared to 2019, totaling approximately 1,600 This increase includes companies that participated in COVID-19-related bailout programs, as well as several nationalized entities unrelated to the pandemic Notably, around two-thirds of the new SO-MNEs emerged due to minority stakes held by public pension funds or sovereign wealth funds The remaining new SO-MNEs are primarily smaller firms from transition economies like Belarus and Ukraine, with limited information on their governance structures becoming available recently These companies, often remnants of highly integrated markets, typically operate with a single affiliate in a neighboring country, such as the Russian Federation, and are generally not active in international capital markets.
In 2020, State-Owned Multinational Enterprises (SO-MNEs) from emerging markets significantly cut their international acquisitions, dropping from $37 billion to $24 billion, highlighting their vulnerability to the ongoing crisis This decline reflects a broader trend of reduced overseas activity by these enterprises over time.
Source: UNCTAD, based on Refinitiv and Orbis BvD.
Developed economies Developing and transition economies
Figure I.20 Cross-border acquisitions by SO-MNEs, 2015–2020
Chapter I Global Investment Trends and Prospects 29
The momentum for regional FDI is expected to grow over the coming years
Policy pressures for strategic autonomy and the need for business resilience are driving the development of regional production networks However, a significant increase in intraregional foreign direct investment (FDI) would mark a substantial departure from historical trends, as recent data indicates that investment connections remain predominantly global rather than regional.
In the post-pandemic world, there is a strong expectation that international production networks will increasingly focus on regionalization, as highlighted by Enderwick and Buckley (2020) According to the WIR20 report, regionalization is identified as one of the four most probable trends shaping international production by the year 2030.
However, the starting point – the geographical spread of FDI networks today – is often unclear The measurement of the size of intraregional investment stock is not straightforward
Indirect investment flows through conduit jurisdictions and pass-through entities make it difficult to discern geographical patterns in the global FDI network (WIR16 and WIR19)
To effectively identify intraregional foreign direct investment (FDI), it is essential to distinguish between ultimate ownership (UO) patterns and mere financial flow patterns This section introduces a novel analytical framework designed to clarify trends in intraregional investment, while also tackling the statistical challenges posed by indirect FDI.
The simplest approach to sizing intraregional investment is to sum the values of bilateral
Foreign Direct Investment (FDI) stock between two countries within the same region encompasses a variety of bilateral connections These connections include direct relationships between the ultimate investor and the final destination, as well as instances of double-counted pass-through investments Such pass-through investments occur when an investor from one country in the region invests in another regional country through a conduit located in a third regional country Additionally, FDI may involve scenarios where the final productive investment or the ultimate owner is situated outside the region.
Different types of links are crucial for understanding the regional exposure of countries regarding external assets and liabilities, highlighting patterns of financial integration However, not all components equally contribute to real economic integration Links where both the ultimate owner and the investment are situated within the region are more significant than "artificial" intraregional investment links, which are formed when external investors channel their investments through regional hubs, such as holding companies or regional headquarters.
Intraregional Foreign Direct Investment (FDI) can be categorized into two main types: conduit entities, which may involve double-counted regional investments or investments directed to recipients outside the region, and non-conduit investments in productive assets Non-conduit investments can stem from either extraregional or regional ultimate investors, with the regional investments representing the UO component of intraregional FDI.
Recent advances in UNCTAD’s methodology for the measurement of conduit investment and the tracking of UO links make it possible to quantify each component (box I.1)
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Source: UNCTAD bilateral FDI database UNCTAD estimates.
Intraregional FDI Conduit Non-conduit Extraregional ultimate
Intraregional FDI stock: bilateral inward stock by main components,
2019 (Trillions of dollars and per cent)
The most straightforward method for measuring intraregional Foreign Direct Investment (FDI) is by totaling the bilateral FDI stocks between pairs of countries within a region This technique effectively combines various forms of bilateral connections.
Case A Direct links between an ultimate investor and an ultimate recipient.
Case B Conduit investment between an ultimate investor and an ultimate recipient in the region.
Case C Direct links with an ultimate recipient outside the region.
Case D Direct links with an ultimate investor outside the region.
Various cases can be categorized into four archetypes, with components A, B1, B2, C1, and D2 typically represented as bilateral FDI stock in official statistics, albeit with some discrepancies among international organizations Unlike the IMF Coordinated Direct Investment Survey (IMF-CDIS), UNCTAD excludes investments made through special-purpose entities (SPEs) from the total stock figures reported by countries, which helps to partially clarify cases B and C For a comprehensive analysis of intraregional investment, it is essential to evaluate all conduit investments, not just those indicated by reported SPEs, while also considering case D, which involves extraregional ultimate investors.
A comprehensive breakdown of intraregional foreign direct investment (FDI) stock facilitates the analysis of intraregional ultimate ownership (UO) connections These connections refer to the relationship between real investments in productive assets in one economy, known as the ultimate recipient, and the investors who ultimately control these assets from another economy within the same region, referred to as the ultimate owner.
Intraregional foreign direct investment (FDI) refers to the bilateral economic connections between two countries within the same region Data for this type of investment can be sourced from balance-of-payment statistics, with key resources including the UNCTAD bilateral FDI database, OECD's international direct investment statistics, and the IMF's CDIS.