The Global FDI Network: Searching for Ultimate Investors
IMF Working Papers, November 17, 2017
Source details
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- The Global FDI Network: Searching for Ultimate Investors
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Bibliographic details
- Authors: Jannick Damgaard, Thomas Elkjaer
- Published: November 17, 2017
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484329658.001
Key objectives and scope
- Addresses three types of geographical decoupling in foreign direct investment (FDI):
- (i) large bilateral asymmetries between inward and outward FDI
- (ii) the role of special purpose entities (SPEs)
- (iii) the effect of moving from immediate counterpart to ultimate investing economy (UIE)
- Estimates a unique global FDI network where SPEs are removed and FDI positions are broken down by the UIE.
Main findings
- Total inward FDI in the new network is reduced by one-third.
- Financial centers are less dominant in the reconstructed network.
- The study highlights challenges when using traditional FDI data as a proxy for real economic integration between economies.
Methodological highlights
- Construction of a global FDI network with SPEs removed.
- Reallocation of FDI positions from immediate counterparties to ultimate investing economies (UIE).
Policy-relevant implications
- Traditional FDI statistics can misrepresent real economic integration due to bilateral asymmetries, SPEs, and intermediate conduit jurisdictions.
- Removing SPEs and allocating FDI to UIEs produces a materially different picture of global FDI stocks and the role of financial centers.
- Users of FDI data (policymakers, analysts, researchers) should account for these decoupling issues when interpreting FDI positions and designing related policy.
Publication and metadata
- Authors: Jannick Damgaard, Thomas Elkjaer
- Date: November 17, 2017
- Series: Working Paper No. 2017/258
- Issue: 258
- Volume: 2017
- Pages: 25
- DOI: https://doi.org/10.5089/9781484329658.001
- Stock No: WPIEA2017258
- ISBN: 9781484329658
- ISSN: 1018-5941
- Subjects: 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
Source: IMF Working Papers — "The Global FDI Network: Searching for Ultimate Investors", Jannick Damgaard and Thomas Elkjaer, November 17, 2017.
Content in this bundle
- 1. List of Low-Tax Economies (Content unit: wp17258)