{
  "title": "What Is Real and What Is Not in the Global FDI Network?",
  "publication": "IMF Working Papers, December 2019",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2019/12/11/what-is-real-and-what-is-not-in-the-global-fdi-network",
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  "summary": "<p>Macro statistics on foreign direct investment (FDI) are blurred by offshore centers with enormous inward and outward investment positions.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Title: What Is Real and What Is Not in the Global FDI Network?\n- Authors: Jannick Damgaard, Thomas Elkjaer, Niels Johannesen\n- Publication type: Working Paper No. 19/274\n- Date: December 11, 2019\n- Core objective: Estimate the global FDI network while disentangling real investment and phantom investment and allocating real investment to ultimate investor economies."
    },
    {
      "heading": "Methods and data",
      "content": "- Uses several new data sources, both macro and micro, to estimate the global FDI network.\n- Focus on identifying corporate shells with no substance and no real links to the local economy."
    },
    {
      "heading": "Key findings",
      "content": "- Phantom investment into corporate shells with no substance and no real links to the local economy may account for almost 40 percent of global FDI.\n- Ignoring phantom investment and allocating real investment to ultimate investors increases the explanatory power of standard gravity variables by around 25 percent."
    },
    {
      "heading": "Implications for analysis and policy",
      "content": "- Macro FDI statistics are substantially distorted by offshore centers with enormous inward and outward investment positions.\n- Reallocating FDI to ultimate investor economies and removing phantom investment improves the fit of empirical models (standard gravity specifications) substantially, implying better-informed policy and analysis when adjusted measures are used.\n\nSource: IMF Working Paper No. 19/274 (authors: Jannick Damgaard, Thomas Elkjaer, Niels Johannesen), December 11, 2019.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2019/12/11/what-is-real-and-what-is-not-in-the-global-fdi-network"
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    "Authors: Jannick Damgaard, Thomas Elkjaer, Niels Johannesen",
    "Published: December 11, 2019",
    "Title: What Is Real and What Is Not in the Global FDI Network?",
    "Authors: Jannick Damgaard, Thomas Elkjaer, Niels Johannesen",
    "Publication type: Working Paper No. 19/274",
    "Date: December 11, 2019",
    "Core objective: Estimate the global FDI network while disentangling real investment and phantom investment and allocating real investment to ultimate investor economies.",
    "Uses several new data sources, both macro and micro, to estimate the global FDI network.",
    "Focus on identifying corporate shells with no substance and no real links to the local economy.",
    "Phantom investment into corporate shells with no substance and no real links to the local economy may account for almost 40 percent of global FDI.",
    "Ignoring phantom investment and allocating real investment to ultimate investors increases the explanatory power of standard gravity variables by around 25 percent.",
    "Macro FDI statistics are substantially distorted by offshore centers with enormous inward and outward investment positions.",
    "Reallocating FDI to ultimate investor economies and removing phantom investment improves the fit of empirical models (standard gravity specifications) substantially, implying better-informed policy and analysis when adjusted measures are used.",
    "**Working Paper**"
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