2018年-PIIE彼得森国际经济研究所_Foreign_Direct_Investment_in_Times_of_Crisis_19页_585kb

Summary of "Foreign Direct Investment in Times of Crisis"

Core Content

This paper analyzes the impact of the 2007-2010 global financial crisis on foreign direct investment (FDI) flows, comparing it with past economic crises to assess the severity and policy responses. The authors argue that the current FDI recession is more severe than previous ones and has a broader global impact. They also suggest that policymakers should rethink FDI strategies with a focus on "sustainable FDI" rather than merely liberalizing investment regimes.

Main Points

• FDI Recession Overview:
  Global FDI flows reached a peak of $2 trillion in 2007, but fell sharply during the crisis. In 2008, FDI declined by 16%, and by 2009, it dropped by an additional 40%. In 2010, FDI levels stagnated at around $1 trillion. The decline is attributed to:

  • Liquidity constraints for transnational corporations (TNCs)
  • Reduced economic growth leading to decreased appetite for FDI
  • A shift toward safer investments and reduced risk-taking by TNC managers

• Impact on Developed vs. Emerging Markets:

  • Developed countries experienced the largest FDI outflows, with a 67% drop in cross-border M&A from 2007 to 2009.
  • Emerging markets initially acted as a stabilizer, with FDI inflows increasing in 2008 despite negative net inflows from portfolio investments and bank lending.
  • By 2009, FDI inflows and outflows in emerging markets also declined, marking the recession as truly global.

• FDI Recovery Trends:

  • Inflows to emerging markets began to recover in 2010, driven by Latin America and Asia.
  • Equity investment levels have declined more significantly in the current crisis than in past ones, suggesting a longer recovery period.
  • The paper highlights that the global nature of the current crisis has led to a more pronounced impact on FDI than previous localized crises.

• FDI During Past Crises:

  • Historical FDI data from past crises (e.g., the 1970s oil shocks, 1982, 1991, and 2001 crises) show that recovery typically took around three years.
  • The 2001 FDI recession was particularly severe, with a more than 40% drop in real inward FDI and a slow recovery that did not reach pre-crisis levels until 2006.
  • In contrast, the current recession has not seen a similar rapid recovery, and the authors suggest it may last longer.

• Fire Sale FDI:

  • The concept of "fire sale" FDI, where domestic assets are sold at bargain prices to foreign buyers, was more common in past crises like the East Asian crisis.
  • However, the current crisis has not seen the same level of fire sale activity, possibly due to tighter liquidity constraints and more cautious behavior by TNCs.

• Policy Responses:

  • While some countries have moved toward a more balanced approach between investor and host country rights, this shift is not directly linked to the crisis but rather to the rise in investor-state disputes.
  • National FDI regimes have largely remained open, with no significant protectionist backlash observed.
  • The paper notes that the current FDI policy environment is more liberal than in the early 2000s, which may lead to faster recovery.

• Emerging Market Role:

  • Emerging markets have become a major source of FDI, accounting for over 25% of global outflows in 2009.
  • However, their outflows still constitute only about a quarter of global FDI, and they are not yet sufficient to drive a full recovery in global FDI flows.

Key Findings

• The current FDI recession is the most severe since the 1970s, with a greater magnitude than previous global crises.
• Equity investment has declined more significantly than other FDI components, indicating a longer-term impact.
• The global scale of the crisis has affected TNCs worldwide, leading to a more cautious approach to investment.
• While emerging markets have played a growing role in FDI, they are not yet the main drivers of recovery.
• The paper concludes that a "sustainable FDI" strategy should be prioritized over simply liberalizing FDI regimes.

Conclusion

The authors recommend that policymakers use the current downturn as an opportunity to reassess FDI policies, focusing on sustainability and long-term development rather than short-term liberalization. They suggest that the recovery from the current FDI recession may be slower and more prolonged than in past crises, with global FDI flows potentially not returning to pre-crisis levels until at least 2014.