What Is Real and What Is Not in the Global FDI Network?

Research output: Working paperResearch

Macro statistics on foreign direct investment (FDI) are blurred by offshore centers withenormous inward and outward investment positions. This paper uses several new datasources, both macro and micro, to estimate the global FDI network while disentangling realinvestment and phantom investment and allocating real investment to ultimate investoreconomies. We find that phantom investment into corporate shells with no substance and noreal links to the local economy may account for almost 40 percent of global FDI. Ignoringphantom investment and allocating real investment to ultimate investors increases theexplanatory power of standard gravity variables by around 25 percent.
Original languageDanish
PublisherInternational Monetary Fund
Number of pages55
Publication statusPublished - Dec 2019
SeriesIMF Working Papers
Number274
Volume19
ISSN1018-5941

    Research areas

  • Faculty of Social Sciences - Development, Offshore financial centers, Foreign investment, Economic integration, Economic growth, Global FDI Network, Special Purpose Entities, Phantom FDI, Real FDI, WP, FDI, total FDI, SPEs, ultimate owner, Orbis

Links

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