United Nations Conference on Trade and Development
Uploaded by: Knoema
Accessed On: 13 August, 2018
This dataset contains information on foreign direct investment (FDI) inward and outward flows and stock, expressed in millions of dollars. These figures correspond to the Statistical Annexes of the UNCTAD World Investment Report.
The World Investment Report, which is released in June each year (t), contains annual data up to the year before (t-1). However, at the time of publication, the data for the most recent year are still preliminary and are subject to revision by the national authorities. When they revise data, UNCTAD updates its database accordingly.
The dataset also presents the following indicators: the percentage share of each economy/group in the world, and percentage ratios of FDI to GDP.
Foreign direct investment (FDI) is an investment made by a resident enterprise in one economy (direct investor or parent enterprise) with the objective of establishing a lasting interest in an enterprise that is resident in an another economy (direct investment enterprise or foreign affiliate). The lasting interest implies the existence of a long-term relationship between the direct investor and the direct investment enterprise and a significant degree of influence on the management of the enterprise. The ownership of 10% or more of the voting power of a direct investment enterprise by a direct investor is evidence of such a relationship.
FDI flows comprise mainly three components:acquisition or disposal of equity capital. FDI includes the initial equity transaction that meets the 10% threshold and all subsequent financial transactions and positions between the direct investor and the direct investment enterprise;reinvestment of earnings which are not distributed as dividends;inter-company debt.
FDI flows are transactions recorded during the reference period (typically year or quarter). FDI stocks are the accumulated value held at the end of the reference period (typically year or quarter).
In 2014, many countries implemented the new guidelines for the compilation of FDI data based on the Sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) and the Fourth edition of OECD Benchmark Definition of Foreign Direct Investment (BD4). One of the major changes introduced in BPM6 and BD4 is the presentation of FDI statistics on an asset/liability basis instead of the directional principle (as recommended by the previous editions of these guidelines).
On an asset/liability basis, direct investment statistics are organized according to whether the investment relates to an asset or a liability for the reporting country.
Under the directional principle, the direct investment statistics are organized according to the direction of the investment for the reporting country - either inward or outward.
The two presentations differ in their treatment of reverse investment (reverse investment is when an affiliate provides loans to its parent). Under the directional presentation, reverse investment is subtracted to derive the total outward or inward investment of the reporting economy. Therefore, FDI statistics on an asset/liability basis tends to be higher than those under the directional principle, but such is not always the case.
While the presentation on an asset/liability basis is appropriate for macroeconomic analysis (i.e. the impact on the balance of payments), the presentation on directional principle is more appropriate to assist policymakers and government officials to formulate investment policies. This is because the presentation of the FDI data on directional basis reflects the direction of influence by the foreign direct investor underlying the direct investment: inward or outward direct investment.
FDI data in this table are on directional principle, unless otherwise indicated