The paper 'Key Changes in International Production' is a great example of a Business Assignment. The year 2013 recorded a Global FDI flows increase of 9% to a figure of $1.45 trillion as compared to $1.33 trillion of the previous year. This increase came in spite of international investments’ volatility resulting from a shift in the expectations of the market towards a former tapering of quantitative easing in the US1. There was an increase in FDI inflows in all principal economic groupings; these are transition, developing, and developed economies.
Developed economies’ share of total global FDI inflows was low but an increase is expected in the next three years. There was also a 9% increase of Global inward FDI stock to a figure of $25.5 trillion, a clear reflection of FDI inflows increase alongside stock markets’ outstanding performance in several parts of the globe. 1.1.1 FDI by Region An analysis of FDI by region takes into account FDI inflows and outflows. The 2013 increase in global FDI inflows (of 9%) is a reflection of a moderate recovery with respect to economic growth alongside a number of large cross-border M& A transactions1.
Ideally, the improvement spread across the three groupings of economies. It is, however, worth noting that there were different reasons for the increase in various parts of the world. ____________________ 1.UNCTAD, 2014. World Investment Report. United Nations Conference on Trade and Development. There was a 9% increase in FDI inflows to developed countries to a figure of $566 billion; this increase was primarily via improved earnings in EU foreign affiliates thus enhanced FDI to members of the European Union. With respect to the developing economies, there was an increase of FDI inflows to $778 billion which translates to 54% of the total global FDI inflows2.
In transition economies, there was also a 28% increase of FDI inflows to a figure of $108 billion which translates to 7% of the total global inflows. There was an increase of inflows to developing Asia with all sub-regions recording an increase apart from West Asia. A 14% increase in FDI inflows was registered in the Caribbean and Latin America following continued stability in the year 20122. Unlike the case in the three previous years, Central America became the region’ s main driver.
There was a 4% increase of FDI inflows to Africa resulting in a figure of $57 billion. Countries in the southern part of the continent particularly South Africa are characteristic of high inflows. Continued social and political tensions were the main reasons behind the decline of FDI inflows to many North African countries. Lower levels of inflows to Nigeria were a reflection of foreign transitional corporations retreat from the oil industry. Developed countries in Europe recorded a three percent increase in FDI inflows as compared to the previous year.
North America recorded a 23% growth of FDI inflows owing to acquisitions by Asian investors. There was a 5% increase in FDI outflows to a figure of $1.41 trillion as investors from transition and developing economies went on with overseas expansion as a response to investment liberalization and economic growth alongside high-income streams as a result of high prices of commodities2.
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