Global FDI Trends: An Analysis of Investment in the World Economy

This report examines the current trends in Foreign Direct Investment (FDI) within the global economy, highlighting its significance as a crucial aspect of socio-economic development. It notes the rapid growth of FDI in the early 2000s due to economic reforms and investment-oriented policies, followed by a dramatic decline during the global financial crisis. The report references the World Investment Report 2019, indicating a 23 percent fall in global FDI flow in 2017, contrasting with the progress in trade and GDP. A key feature is the decline in FDI flow among developed economies, while developing countries remained stable. The report concludes by emphasizing FDI's role as a stable form of international finance compared to other investment types.

Running head: GLOBAL BUSINESS IN THE ASIAN CENTURY
Global Business in the Asian Century
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1GLOBAL BUSINESS IN THE ASIAN CENTURY
Table of Contents
Trend of FDI in world economy......................................................................................................2
References........................................................................................................................................4

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Trend of FDI in world economy
Since the beginning of 2000, FDI had started to grow at a faster pace across the globe.
The rapidly increasing trend of Foreign Direct Investment indicates an improvement in overall
economic environment because of adaption of economic reform and different investment
oriented policies. Flow of FDI has become one crucial aspect of global economy in modern
world. Globally, FDI is seen a as one vital channel of socio-economic development. The
dramatic decline in FDI flow globally due to global financial crisis thus raised a global concern
(Chan, 2016). The path of recovery in the trend FDI was slow. The inflow of FDI has shrunk in
2016. Some countries and region were more vulnerable than other regions. Advanced
industrialists nations attracts 59 percent of total global FDI. The two top destinations of FDI
inflow are United Kingdom and United States. In case of developing nations, the share of FDI is
14 percent. Today, FDI in the global economy represents most stable and substantial form of
international finance as compared to portfolio investment, remittances and aid
Table 1: Statistics of FDI flow in the world economy
(Source: unctad.org, 2019)
The global flow of FDI in 2017 fell by 23 percent reaching to $1.43 trillion from
recorded FDI flow of $1.87 trillion in 2016. The decline in FDI flow is in sharp contrast to other

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variables representing macroeconomic state of the economy such as trade and GDP that recorded
considerable progress in 2017 (unctad.org, 2019). One notable feature of current FDI trend in the
world economy is there is a significant decline in FDI flow among the developed economies. In
contrast, FDI flow in developing countries remain almost same or increases slightly.

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References
Chan, S. (Ed.). (2016). Foreign direct investment in a changing global political economy.
Springer.
World Investment Report. (2019). Retrieved from
https://unctad.org/en/PublicationsLibrary/wir2018_overview_en.pdf