Foreign direct investment stocks
Foreign direct investment (FDI) is a key element in international economic integration. FDI creates direct, stable and long-lasting links between economies. It encourages the transfer of technology and know-how between countries, and allows the host economy to promote its products more widely in international markets. FDI is key to the creation of many global value chains by allowing firms to link and organise production across countries.
Definition
Foreign direct investment is a category of investment that reflects the objective of establishing a lasting interest by a resident enterprise in one economy in an enterprise that is resident in an economy other than that of the direct investor. The direct or indirect ownership of 10% or more of the voting power is evidence of such a relationship.
FDI positions relate to the stock of investments at a given point in time (e.g. end of year). FDI positions include equity (10% or more voting shares), reinvestment of earnings and inter-company debt.
Comparability
In 2014, the implementation of the latest international standards for compiling FDI statistics came into widespread use, which generally enhanced the comparability of FDI statistics across countries. However, some differences remain. For example, data for Brazil, India, Korea, South Africa and Switzerland are on an asset/liability basis while data for the other countries are on a directional basis. Implementation of the new standards also caused major changes to FDI statistics. Therefore, long historical series are not available for all countries.
Data for Austria, Belgium, Chile, Denmark, Hungary, Iceland, Luxembourg, Mexico, the Netherlands, Norway, Poland, Portugal and Spain exclude resident Special Purpose Entities.
The EU28 aggregate has an evolving composition: EU15 until end 2003; EU25 for 2004-06; and EU27 for 2007-12.
At the end of 2014, OECD FDI stocks of outward and inward FDI stood at USD 19.8 trillion and USD 16.6 trillion respectively, a level that almost doubled as compared to the 2005 positions (at USD 10.2 trillion and USD 8.5 trillion respectively). For many countries, 2014 shows a decrease of their stock of inward and outward FDI from 2013, a development due in most cases to movements in the US dollar, which is used for the conversions.
OECD investors account for around 80% of the global stock of outward FDI in 2014 as compared to 90% in 2005. The top three investing countries worldwide are the United States, Germany and the United Kingdom, accounting for 38% of global FDI outward stocks. OECD countries host 57% of the global stock of inward FDI in 2014 as compared to 73% in 2005. The top three hosts of FDI stocks worldwide in 2014 are the United States, China and the United Kingdom, which together represent 33% of the global stock of inward FDI.
Sources
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OECD (2015), OECD International Direct Investment Statistics (Database).
Further information
Analytical publications
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OECD (2015), OECD Business and Finance Outlook, OECD Publishing.
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OECD (2015), OECD Investment Policy Reviews, OECD Publishing.
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OECD (2014), Annual Report on the OECD Guidelines for Multinational Enterprises, OECD Publishing.
Statistical publications
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OECD (2010), Measuring Globalisation: OECD Economic Globalisation Indicators, OECD Publishing.
Methodological publications
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Kalinova, B., A. Palerm and S. Thomsen (2010), “OECD’s FDI Restrictiveness Index: 2010 Update”, OECD Working Papers on International Investment, No. 2010/03.
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OECD (2009), OECD Benchmark Definition of Foreign Direct Investment, Fourth edition, OECD Publishing.
Websites
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Foreign Direct Investment Statistics – OECD Data, Analysis and Forecasts, www.oecd.org/investment/statistics.
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OECD International Investment, www.oecd.org/daf/investment.
