PREFACE

ACKNOWLEDGEMENTS

OVERVIEW

PART ONE
ANOTHER YEAR OF FDI GROWTH

CHAPTER I. GLOBAL TRENDS: RISING FDI INFLOWS

A. OVERALL TRENDS AND DEVELOPMENTS IN FDI

1. Trends, patterns and characteristics

a. Global FDI
b. Sectoral analysis: revival of FDI in natural resources
c. Trends in international production

2. Some issues concerning FDI statistics: what is behind the numbers?

3. A new wave of cross-border M&As

a. Recent trends
b. Cross-border M&As versus greenfield FDI
c. An emerging trend: the rise in FDI by collective investment funds

4. FDI performance and potential

1. National policy changes

2. Recent developments in international investment arrangements

a. The IIA network continues to expand

b. Systemic issues in international investment rule-making

1. The world’s 100 largest TNCs

2. The top 100 TNCs from developing economies

3. Transnationality of top TNCs

4. TNCs’ most-favoured locations

5. The world’s 50 largest financial TNCs

D. PROSPECTS

CHAPTER II. REGIONAL TRENDS: FDI GROWS IN MOST REGIONS

Introduction

1. Africa

a. Geographical trends

(i) Growth driven by high commodity prices

(ii) Outward FDI: down in 2005

b. Sectoral trends: FDI up in the primary sector

c. Policy developments

d. Prospects

2. South, East and South-East Asia, and Oceania

a. Geographical trends

(i) Inward FDI: continues to soar

(a) South, East and South-East Asia

(b) Oceania

(ii) Outward FDI: overall decline, but flows from China surge

(a) South, East and South-East Asia

(b) Intraregional FDI

b. Sectoral trends

(i) Inward FDI: strong growth in services and high-tech industries

(ii) Outward FDI: growing interest in natural resources

c. Policy developments

d. Prospects

3. West Asia

a. Geographical trends

(i) Inward FDI: unprecedented rise

(ii) Outward FDI: petrodollars boost investment

b. Sectoral trends: rising flows to energy-related industries

c. Policy developments

d. Prospects

4. Latin America and the Caribbean

a. Geographical trends

(i) Inward FDI: strong increase to Andean countries

(ii) Outward FDI: continued growth

b. Sectoral trends: natural resources and manufacturing increasingly targeted

c. Policy developments

d. Prospects

1. Geographical trends

a. Inward FDI: fifth year of growth

b. Outward FDI: strong performance of Russian TNCs continues

2. Sectoral trends: manufacturing dominates inflows, natural resources lead outflows

3. Policy developments

4. Prospects

1. Geographical trends

a. Inward FDI: recovering from the downturn 

b. Outward FDI: overall decline

2. Sectoral trends: inflows up in all sectors

3. Policy developments

4. Prospects

PART TWO
FDI FROM DEVELOPING AND TRANSITION
ECONOMIES: IMPLICATIONS FOR DEVELOPMENT

INTRODUCTION

CHAPTER III. EMERGING SOURCES OF FDI

A. DEVELOPING AND TRANSITION ECONOMIES GAIN GROUND AS HOME COUNTRIES

1. FDI from developing and transition economies increases

a. Growing overseas investments from developing and transition economies

b. Cross-border mergers and acquisitions on the rise

c. Greenfield and expansion investments

2. Growing importance of Asia as a source of FDI

3. Services dominate

4. South-South FDI becomes significant

B. GLOBAL AND REGIONAL PLAYERS EMERGING FROM DEVELOPING AND TRANSITION ECONOMIES

1. The rise of TNCs from developing and transition economies

2. TNCs from Africa

3. TNCs from Asia

a. TNCs from East and South-East Asia

b. TNCs from South Asia

c. TNCs from West Asia

4. TNCs from Latin America and the Caribbean

5. TNCs from South-East Europe and the CIS

C. SALIENT FEATURES OF THE EMERGING SOURCES OF FDI

NOTES

CHAPTER IV. DRIVERS AND DETERMINANTS

A. CONCEPTUAL FRAMEWORK

1. The theory of transnational corporations and foreign direct investment

2. The investment development path and the emergence of TNCs from developing and transition economies

3. Application of the theory to TNCs from developing and transition economies

1. Sources of competitive advantages

2. Drivers to internationalization

a. Home country drivers (push factors)

b. Host country drivers (pull factors)

c. Empirical evidence on drivers (push and pull)

3. Motivations and strategies

a. Market-seeking

b. Efficiency-seeking

c. Resource-seeking

d. Created asset-seeking

e. Other motives

C. CONCLUSIONS

NOTES

CHAPTER V. IMPACT ON HOME AND HOST DEVELOPING ECONOMIES

A. IMPACT ON HOME ECONOMIES

1. Outward FDI and the competitiveness of developing-country TNCs

2. Outward FDI and the competitiveness and restructuring of home-country industries

a. Industrial competitiveness

b. Industrial restructuring

3. Macroeconomic, trade and employment effects in the home economy

a. Financial resource flows and balance of payments

b. Domestic investment

c. International trade

d. Employment

4. Concluding remarks

B. IMPACT ON HOST ECONOMIES

1. Assessing host-country impact

2. Impact on host developing economies

a. Financial resource flows and investment

b. Technology and skills

c. International trade

d. Employment

e. Other impacts

3. Concluding remarks

C. CONCLUSIONS

NOTES

CHAPTER VI. NATIONAL AND INTERNATIONAL POLICIES

A. THE ROLE OF HOME-COUNTRY POLICIES

1. Competitiveness policies and outward FDI

2. Policies specific to outward FDI

a. More countries remove barriers to outward FDI

b. Active promotion of outward FDI

(i) Main instruments used to promote outward FDI

(ii) Agencies promoting outward FDI

c. Home-country measures to promote South-South FDI

3. Mitigating potential risks associated with outward FDI

1. Host-country policies for maximizing the benefits from South-South FDI

2. More FDI sources for IPAs to target

3. Reactions to takeovers by TNCs from developing countries

1. The growing role of IIAs

2. Regional economic integration agreements and South-South FDI

D. CORPORATE SOCIAL RESPONSIBILITY AND TNCS FROM DEVELOPING AND TRANSITION ECONOMIES

1. Multilaterally agreed CSR principles

2. Benefits for TNCs from the South from addressing CSR issues

3. Encouraging good practices

E. CONCLUDING REMARKS

NOTES

CONCLUSIONS

REFERENCES

SELECTED UNCTAD PUBLICATIONS ON TNCs AND FDI

QUESTIONNAIRE