Trends in Global Fdi Evolution

The Global Investment Trends Monitor, No. 50 published by UN Trade and Development (UNCTAD) reports that global foreign direct investment (#FDI) increased by an estimated 14 percent in 2025 to approximately USD 1.6 trillion. While this headline growth suggests a rebound after two subdued years, the report emphasizes that the recovery remains structurally weak and uneven. A substantial share of the increase reflects financial flows routed through #global financial centres, rather than new productive investment. When these conduit flows are excluded, underlying FDI growth is estimated at only around 5 percent, highlighting persistent investor caution. Key indicators of long-term #investment confidence continued to deteriorate. The value of cross-border mergers and acquisitions declined, international project #finance fell for a fourth consecutive year, and the number of greenfield investment announcements dropped, pointing to reduced momentum in the creation of new productive capacity. These trends signal that global investment remains constrained by heightened uncertainty, tighter financing conditions, and geopolitical fragmentation. The report identifies deepening geographic disparities in investment flows. FDI to developed economies rose sharply—by more than 40 percent— driven largely by Europe and major financial hubs. In contrast, FDI to developing economies declined modestly, and approximately three-quarters of least developed countries experienced stagnant or falling inflows, reinforcing long-standing structural inequities in access to international capital. Sectorally, investment is becoming increasingly concentrated in capital-intensive, #technology-driven activities, particularly #datacentres and #semiconductor manufacturing, reflecting accelerating demand for #digital #infrastructure and #artificialintelligence capabilities. Meanwhile, investment in infrastructure and renewable #energy weakened further, raising concerns for countries that rely heavily on foreign capital to finance climate mitigation, energy transition, and sustainable development objectives. Although domestic investment partially offset this decline in some markets, it did not fully compensate for reduced foreign participation. Looking ahead, United Nations Conference on Trade and Development projects a highly uncertain outlook for 2026. While modest growth in FDI is possible if financing conditions ease, persistent geopolitical tensions, policy uncertainty, and economic fragmentation continue to pose significant risks to inclusive, development-oriented investment. #economy #trade #investments #strategy #ecosystem #future #finance #fintech

Based on data from the Trendeo global database, we profile different regions in terms of investments and job creation. 📊🌍 The European Union accounts for 9% of global investment from 2019 to May 2024, with a slightly downward trend since 2022 📉, which was confirmed last year and is continuing this year 📉 (it has declined from 9.4% of global investment in 2019 to 9.1% in 2023). While the region saw a significant increase in investments in chemicals 🧪, pharmaceuticals 💊, and metallurgy 🏭 in 2023 compared to 2022, there was a decline in very important sectors such as electronics 💻 and electrical equipment 🔌 - however, these two sectors remain at a higher investment level than their average over the past five years 📈. Electronics remains the sector with the highest investments (over 23.8 billion USD), notably including the 8 billion USD expansion of GlobalFoundries semiconductor plant in Germany 💻🏭. Significant investments were made in 2023 in electricity and gas (18.1 billion USD) ⚡🔋, pharmaceuticals (18 billion USD) 💊, and electrical equipment (13.6 billion USD) 🔌. Investments in other sectors such as military vehicles 🚁 and aerospace ✈️ also saw a strong increase in 2023 📈. Overall, manufacturing industries represent more than 60% of investments in the region over the past five years 🏭. Germany and France together account for 35% of investments in the European Union during this period 🇩🇪🇫🇷. Overall, Western European countries account for 46% of total investments, particularly in manufacturing industries (52%) 🏭, data centers (54%) 💻, and R&D activities (94%) 💡. Trends over the past five years show a decline in Western and Northern Europe within the EU 📉 (the East's share decreased from 48% to 46%, and the North's share from 15% to 13%). Central and Eastern Europe and Southern Europe are seeing increases 📈, from 20% to 22% for the former, and from 17% to 20% for the latter. The United States accounts for nearly 40% of industrial FDI received by the European Union since 2019 🇺🇸, making it by far the largest foreign investor in the EU (mainly in electronics 💻). East Asian countries, led by China 🇨🇳, account for nearly a third of industrial FDI (32%). Switzerland 🇨🇭, the United Kingdom 🇬🇧, and the United Arab Emirates 🇦🇪 constitute the bulk of the remaining foreign investment in the region during this period. #capex #industry #europe

New paper with Agustín Bénétrix and Hayley P.: “The Elusive Link Between FDI and Economic Growth: Sectoral Heterogeneity and Global Value Chains.” FDI is everywhere in policy debates — investment promotion strategies, competitiveness plans, industrial policy toolkits… Yet in the data, its link with growth is often weak, unstable, or even absent. Paraphrasing Solow : we see FDI everywhere… except in growth. In this paper, we show that this reflects how the world economy has changed — especially with the rise of global value chains (GVCs). 🔎 What we find: ✅ The old “FDI works if you have enough human capital / finance” story is robust when we use data for the 1970s–80s ❌ …but largely disappears in later decades 📌 Using a new dataset on sectoral FDI for 112 EMDEs (1975–2023) we uncover strong heterogeneity: FDI ↗ growth in the primary sector no robust link in the secondary sector FDI ↘ growth in the tertiary sector 🌍 And crucially: GVC participation changes the relationship FDI is most strongly linked to growth when GVC integration is low — and the relationship fades (or flips) as fragmentation rises. 💡 Takeaway: FDI can boost production and exports without delivering the same boost to domestic value added and productivity — so aggregate growth regressions may miss the real story. Geneva Graduate Institute Trinity College Dublin #FDI #EconomicGrowth #GlobalValueChains #DevelopmentEconomics #IndustrialPolicy #Trade Paper's here https://lnkd.in/exiRXb78

Greenfield FDI—which puts new production capacity on the ground—has historically shaped global industries from oil to electronics. Today’s FDI announcements signal new change. Announced FDI projects could more than quadruple battery manufacturing capacity outside China, almost double the global data center capacity that powers AI, and draw the United States into the circle of top leading-edge semiconductor-producing nations. And historically 60 to 80 percent of announced projects actually happen. Looking across more than 200,000 announced FDI projects from the past decade, with data current through May 2025, my McKinsey Global Institute colleagues and I find they are increasingly: (1) focused on future-shaping industries, including resources (75% up from about 50% pre-covid). (2) bigger (60% of announcements in future-shaping industries are over $1B, up from under 30%) (3) and geopolitically aligned As they say: ‘when others dig for gold, sell shovels.’ Opportunities abound for companies and countries looking to capitalize on the new FDI shake-up. You can read the report here: https://mck.co/FDI

The global investment landscape is undergoing a quiet but powerful transformation. Announced greenfield foreign direct investment (FDI) in climate and energy transition peaked at $600 billion in 2023, while digital investments — spanning AI and cloud computing — grew their share from 9% to 38% between 2016 and 2025. But this surge is not reaching everyone equally.  Advanced economies continue to dominate. Meanwhile, emerging markets & developing economies (EMDEs) saw their average share of announced FDI fall from 58% to 47% between 2021–2025. As competition for capital intensifies, many developing economies risk being left behind.  The opportunity for new jobs, new capabilities, and new growth paths is real. But so are the risks. Returns on these investments hinge on data flows, power grids, skills, and policies keeping pace.    Read our latest blog to understand where global investment is heading — and what it means for developing economies. https://lnkd.in/enJ_rMSG  by The World Bank Group's Arlan Brucal, Kanako Hasegawa, Francisco Aguilar Cisneros

💡 One of the UN’s most rigorous publications, the World Investment Report 2025 by UN Trade and Development (UNCTAD) is out—with a sobering view of global FDI trends: 🔻 FDI stalls again Real (productive) FDI fell 11% in 2024—the second year of steep decline. A nominal 4% rise (to $1.5 trillion) was driven by volatile flows through European hubs, not actual investment. 🏗 Sustainability sectors hit hard Funding for renewables dropped 31%, water and sanitation 30%, and agrifood 19%. Infrastructure finance fell 26%—a blow to developing countries. 🌍 FDI is flowing the wrong way Europe saw a 58% collapse, while North America rose 23% and Southeast Asia 10%. Developing countries attracted 57% of FDI—but little of it reached critical sectors. 💻 Digital gains—but unequal FDI in the digital economy rose 14%, yet 80% went to just 10 developing countries. The digital divide is widening. 🧭 UNCTAD calls for urgent action: 1. Reform the financial system—mobilize global capital for development. 2. Scale sustainable finance with long-term focus. 3. Close the digital investment gap. 4. Align policies with sustainability goals. 5. Improve investment governance. 6. Strengthen multilateral cooperation to manage global risks. 📘 Full report: https://lnkd.in/eauXcETn

🗺 Our preliminary full-year 2023 greenfield FDI data is live. Don't miss these important, emerging trends that will shape globalisation. 👉 Global FDI activity in 2023 was driven by capital-intensive projects, especially in the renewable energy, batteries and metals sectors, according to fDi Intelligence data. This underscores how the energy transition is driving a large proportion of cross-border investment. Three macro takeaways: 1️⃣ Preliminary full-year 2023 figures indicate an all-time high of 174 FDI projects valued at $1bn or more were announced worldwide, up from the previous high of 156 recorded in 2022.  2️⃣ Software & IT services — our label for the broadly-defined tech industry — slipped from 6th in 2022 to 11th last year in the investment matrix. This is the first time the software industry has fallen out of the top 10 sectors for FDI capex since 2013. 3️⃣ The average capex committed to FDI projects globally stood at $314m in 2023, down slightly from the record $400m a year earlier, but at historic highs unmatched by any other year since records began in 2023. Find out more trends here: https://lnkd.in/ekUiaGnJ #data #trends #globalisation #GraphTime #FDI #capex #foreigninvestment #corporatestrategy #econdev

Our first issue of 2026 is out 🔥 If you’re looking for evidence that globalisation is rebooting, look at our latest cover story. It’s fascinating to see economic theory coming full circle: countries long viewed as recipients of foreign investment are entering a new phase — becoming major sources of global FDI themselves. Alex Irwin-Hunt identified the top 50 MNEs from outside traditional capital-exporting economies that are redrawing the global investment map. James X. Zhan adds an incisive analysis of what this shift means. I suspect this is only the tip of the iceberg, with western MNEs entrenching as their peers from China, India, Japan, Korea, Asean, as well as the Gulf, but also eastern Europe, Latam and Africa making inroads to become global forces to be reckoned with, ultimately breathing new life into the FDI landscape. Explore the top50 list here 👉🏻https://lnkd.in/eX2rWKjv James' analysis here 👉🏻 https://lnkd.in/ew5Rrfgw And the full magazine here 👉🏻 https://lnkd.in/eFAxYdvD Kudos also to Danielle Myles for her cutting-edge reporting and editing; to our fantastic columnists – Didi Caldwell, Lawrence Yeo, Julien Chaisse, Charlie Robertson, Dr. Martin G. Kaspar, Eli David Rokah and our production team led by Elliot Smither, Nicholas Bunce and Andrew Petrie. Shout out to Zhen Du and Paramjit Virdee for the visuals too. #FDI

Nearly $1 TRILLION in foreign capital has poured into the U.S. since 2020, reshaping where and how growth is happening. States like Arizona ($196B) and Texas ($158B) are leading major investments, while North Carolina, California, and Georgia are also seeing strong momentum tied to large-scale projects. What’s driving this wave? ✅Semiconductors ✅EV supply chains ✅Clean energy ✅Advanced manufacturing Foreign investment today is less about broad distribution and more about building long-term ecosystems, where infrastructure, talent, and industry can scale together. For those in real estate and development, this shift is important: Capital flows often signal where future demand, jobs, and growth will follow. Understanding these patterns early can make a meaningful difference in how you position. Source: Visual Capitalist (Voronoi App), fDi Intelligence #RealEstate #FDI #EconomicTrends #PropTech #MarketInsights

As firms navigate #geopolitics, patterns of greenfield foreign direct investment (FDI) flows could change. European Central Bank analysts show the action is mainly falling FDI between blocs of nations--not within them. Beyond narrative and survey "intentions", what hard evidence is there that companies are changing their behaviour in response to rising geopolitical rivalry? Sourcing patterns could change (so far the evidence on this score points to retrenchment by US firms, but not Canadian or European counterparts.) There could be measured changes relating to behaviour of existing subsidiaries (including exit but again the Russian sanctions case urges caution against claims of widespread Western withdrawal.) Intellectual property and hiring behaviour might change but, to be best of my knowledge, few have produced hard evidence on this. As to FDI, there has been more work, not least by the International Monetary Fund and the ECB. A recent research summary by the latter's analysts is below. They divide the world into three blocs: Western, Eastern, and Neutral. Sensibly they control for non-geopolitical drivers of greenfield FDI, and estimate the propensity to invest within blocs and between blocs. Their results show (which differs from how they write up their results) that the propensity to invest within blocs has stayed the same since 2005--but the propensity to invest between blocs has gone down from 2015 to 2021 (see figure 3). There is a wierd spike in both propensities in 2022 that has since faded away. These first of the findings do NOT confirm the following often-made claim : there is more greenfield FDI within geopolitically aligned regions (e.g. within EU, within North America). One this one metric there isn't evidence of greater regionalisation by internationally active business. What the second finding DOES show is thining of new FDI ties between geopolitical blocs. Only in the latter sense can one claim there has been some friendshoring and then only up to 2022. Most curiously of all, when they exclude FDI flows to and from China from the region, they find no change OVER TIME in the ratio of the propensity to invest within versus between geopolitical blocs. Same finding when they drop flows to and from Russia from the estimation results (see figure 4 where the lines excluding China and Russia follow the same trajectory as the baseline regression). So the tendency is not more pronounced when one considers greenfield FDI into and out of these two major non-Western economies. Now, these are aggregate findings. There could be firms & sectors where greenfield FDI decisions have been seriously affected by geopolitical considerations. If so, this implies that there are other firms and sectors that are bucking the oft-mentioned geopolitical retrenchment. Definitely worth further work. https://lnkd.in/eHCdKQDk IMD