文档介绍：International Business
Lecture 5
Foreign Direct Investment
Foreign Direct Investment in the World Economy
The flow of FDI refers to the amount of FDI undertaken over a given time period
The stock of FDI refers to the total accumulated value of foreign owned assts at a given time
The outflows of FDI refer to the flow of FDI out of a country
The inflows of FDI refers to the flow of FDI into a country
Trends in FDI
Flow and stock increased in the last 20 years
In spite of decline of trade barriers, FDI has grown more rapidly than world trade because
Businesses fear protectionist pressures
FDI is seen a a way of circumventing trade barriers
Dramatic political and economic changes in many parts of the world
Globalization of the world economy has raised the vision of firms who now see the entire world as their market
Slumping FDI
Between 2000 and 2004 the value of FDI slumped almost 50% from $ trillion to about $620 billion
The slowdown in FDI flows has been most pronounced in developed nations
The slowdown is probably temporary and reflects three developments
General slowdown in the growth rate of the world economy
Heightened geopolitical uncertainty following the September 11, 2001 attack
Bursting of the stock market bubble in the US
FDI Outflows
The Direction of FDI
Historically, most FDI has been directed at the developed nations of the world as firms based in advanced countries invested in other markets
The US has been the favorite target for FDI inflows
While developed nations still account for the largest share of FDI inflows, FDI into developing nations has increased
Most recent inflows into developing nations have been targeted at the emerging economies of South, East, and Southeast Asia
Gross fixed capital formation summarizes the total amount of capital invested in factories, stores, office buildings, etc.
This makes FDI an important source of capital investment and a determinant of the future growth rate of an economy
FDI Flow by Region
Gross C