What is Real and What is Not in the Global FDI Network?
Publikation: Working paper › Forskning
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What is Real and What is Not in the Global FDI Network? / Damgaard, Jannick; Elkjaer, Thomas; Johannesen, Niels.
2020.Publikation: Working paper › Forskning
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TY - UNPB
T1 - What is Real and What is Not in the Global FDI Network?
AU - Damgaard, Jannick
AU - Elkjaer, Thomas
AU - Johannesen, Niels
PY - 2020/2/14
Y1 - 2020/2/14
N2 - Macro statistics on foreign direct investment (FDI) are blurred by offshore financial centers with enormous inward and outward investment positions. This paper uses new data sources, both macro and micro, to estimate the global FDI network while disentangling real investment and phantom investment and allocating real investment to ultimate investor economies. We find that Phantom FDI into corporate shells with no substance and no real links to the local economy accounts for around 40 percent of global FDI. Ignoring Phantom FDI and allocating Real FDI to ultimate investors increases the explanatory power of standard gravity variables by around 25 percent.
AB - Macro statistics on foreign direct investment (FDI) are blurred by offshore financial centers with enormous inward and outward investment positions. This paper uses new data sources, both macro and micro, to estimate the global FDI network while disentangling real investment and phantom investment and allocating real investment to ultimate investor economies. We find that Phantom FDI into corporate shells with no substance and no real links to the local economy accounts for around 40 percent of global FDI. Ignoring Phantom FDI and allocating Real FDI to ultimate investors increases the explanatory power of standard gravity variables by around 25 percent.
KW - Global FDI Network
KW - Special Purpose Entities
KW - Phantom FDI
KW - Real FDI
U2 - 10.2139/ssrn.3522429
DO - 10.2139/ssrn.3522429
M3 - Working paper
T3 - CEBI Working Paper Series
BT - What is Real and What is Not in the Global FDI Network?
ER -
ID: 248762763