IMF Working Papers

Foreign Direct Investment in the World Economy

ByEdward M. Graham

June 1, 1995

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Format: Chicago

Edward M. Graham "Foreign Direct Investment in the World Economy", IMF Working Papers 1995, 059 (1995), accessed 12/22/2025, https://doi.org/10.5089/9781451847901.001

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The role of foreign direct investment (FDI) in international capital flows is examined. Theories of the determinants of FDI are surveyed, and the economic consequences of FDI for both host (recipient) and home (investor) nations are examined in light of empirical studies. Policy issues surrounding possible negotiation of a “multilateral agreement on investment” are discussed.

Subject: Balance of payments, Capital formation, Economic sectors, Foreign direct investment, National accounts, Transnational corporations

Keywords: Capital formation, competitor firm, Europe, FDI flow, FDI surge, Foreign direct investment, Global, host nation, investor firm, North America, outward FDI, parent firm, Transnational corporations, WP