世界银行-地缘政治碎片化与友好支持_来自项目级外国投资数据的证据（英）-2025.6_41页_1mb

Geopolitical Fragmentation and Friendshoring: Evidence from FDI Data

Summary of Key Findings

1. Introduction and Objectives

This paper examines the impact of geopolitical fragmentation on foreign direct investments (FDI) using project-level data, including greenfield projects, mergers and acquisitions (M&As), and affiliate stocks. It focuses on how geopolitical distance (measured by UN voting patterns, liberal democracy index, public opinion, and bloc alignment) influences FDI flows, with data from 2003 to 2022. The study addresses the rise of friendshoring as a response to growing geopolitical tensions and evaluates its robustness across multiple measures and time periods.

2. Main Contributions

• Geopolitical Effects on FDI: Geopolitical differences have a larger negative impact on FDI since 2011, with the effect doubling by 2022. For example:
  • A one standard deviation drop in UN voting similarity decreased greenfield FDI by 8% in 2011 vs. 16% in 2022.
  • Unfavorable public opinion had a steeper decline, reducing FDI by 38% in 2022 vs. 11% in 2011.
• Friendshoring Trends: Outward FDI from advanced Western economies (e.g., US, Canada, UK) is driven by friendshoring, while Eastern Asian countries like China show increased investment in geographically distant nations despite geopolitical fragmentation.
• Heterogeneity: The effects vary by country origin and sector:
  • US and Chinese companies exhibit opposing behaviors: US firms reduce FDI in geopolitically distant countries, while Chinese firms do not.
  • The impact of geopolitical differences is comparable across strategic, global-value-chain-intensive, and contract-intensive sectors, indicating it is not limited to national security concerns alone.

3. Policy Implications and Conclusions

The study highlights that friendshoring and economic fragmentation threaten global integration by fostering economic blocs, potentially increasing costs and reducing efficiency. Policymakers must balance supply chain resilience with open markets.

4. Methodology Notes

• Data sources: fDi Markets for project-level FDI, Refinitiv Eikon, and multinational firm databases.
• Methods: Gravity models with fixed effects, year-by-year analysis to capture evolving trends.

For a full methodology and detailed empirical results, refer to the original paper.