Working Paper The Global FDI Network: Searching for Ultimate Investors

Working Paper - November 2017 - No. 120

Authors Damgaard, Jannick; Elkjær, Thomas
Subject Other economic analyses; Direct investments; Statistical method
Type Working paper
Year 2017
Published 2 November 2017
This paper addresses three types of geographical decoupling in foreign direct investment (FDI), i.e., challenges when using traditional FDI data as a proxy for real economic integration between economies: (i) large bilateral asymmetries between inward and outward FDI, (ii) the role of special purpose entities (SPEs), and (iii) the effect of moving from immediate counterpart economy to ultimate investing economy (UIE). A unique global FDI network is estimated, where SPEs are removed and FDI positions are broken down by the UIE.