The decline of FDI
- FDI flows fell by 27% in 2018 and by 16% in 2017;
- Foreign capital inflows to the U.S. fell from $509 billion in 2015 to $267 billion in 2018;
- The return on equity of multinationals has fallen from its pre-crisis peak. The ability of firms such as Apple to continue to post continued growth in global sales is being questioned.
The Rise and Fall of FDI
By: Joseph P. Joyce – Wellesley College
Are investments by the digitalized industries changing FDI patterns?
Casella and Formenti find that:
MNEs in highly digitalized industries have a “lighter” FDI footprint than traditional MNEs; they tend to concentrate their operations in a few highly developed countries and their investment patterns are shaped by fiscal and financial motives more than those of traditional MNEs. As digital technologies and business models tend to disseminate across the broader economy, this may suggest the onset of a new era of international production and MNE internationalization paths.
FDI in the Digital Economy: A Shift to Asset-Light International Footprints
Authors: Bruno Casella, Lorenzo Formenti