Outward FDI from developing countries

China An emerging FDI outward investor.

India's outward FDI A giant awakening? Geneva.

Outward FDI from developing countries is highly concentrated.

For recent trends, see India's outward FDI A giant awakening?

Were there fundamental differences between outward FDI from developing countries and outward FDI from developed countries in terms of the FDI's nature, the issues surrounding it or its impact?

Table 1. FDI outward stock, by region and major economies, 1980 2003

For recent trends, see Outward FDI from Brazil Poised to take off?

The transition economies are beginning to engage in outward FDI (Andreff 2003).

Developed countries remain the main source of outward FDI, while developing countries' share has also grown (from one per cent in 1990 to 10 per cent of global outward FDI services stock in 2002).

Some experts stressed that policies had been traditionally oriented to attract FDI and were not really defined as promoting outward FDI.

Table 1. FDI outward stock, by region and major economies, 1980 2003 (concluded)

Information on the sectoral composition of outward FDI from developing countries is limited.

As indicated, detailed outward FDI data reported by home developing countries are limited.

UNCTAD (2004c). Outward FDI from Brazil Poised to take off? Occasional Note. Geneva.

Internationalization of developing country firms through outward FDI Main trends and key issues

An exception is Mexico, from which relatively more outward FDI has been in manufacturing.

The Asian and Pacific region's outward FDI stock was estimated at 607 billion in 2003.

Annex table. Estimated outward FDI stock from developing economies, by sector industries, 1990 and 2002

This figure is based on data on outward FDI stocks provided by the home countries.

The Department of Statistics does not publish annual flow data on outward FDI from Singapore.

The fastest growth in outward FDI was noted for South, East and South East Asia the share of this region in the world outward FDI stock rose from 2.3 per cent to 7.4 per cent between 1990 and 2003.

From low levels of outward FDI, a number of developing countries are now emerging as dynamic sources of FDI, not least in other developing countries.

Rough estimates, however, suggest that outward FDI from developing countries in other developing economies is increasing.

Estimates of South South FDI can be obtained by using information from home developing countries (on the destination of their outward FDI) or from host developing countries (on the source of their inward FDI).

Not much is known about the impact of outward FDI from developing countries in offshore financial centres.

The developed world still accounts for nine tenths of world outward FDI flows, but FDI from developing countries has shown higher growth rates in the recent past.

The estimate of 400 billion of outward stock of South South FDI is based on home country data.

More detailed data are required, however, for a more in depth sectoral analysis of outward FDI from developing countries.

The factors driving outward FDI have been in place in some developing countries in an embryonic form for decades.

Apart from the immediate drivers, the combination of factors and drivers for outward FDI differs by region and country.

With outward FDI stock of 859 billion in 2003, transnational corporations from developing countries are becoming significant international players.

The discussants emphasized that recent developments had revealed a more diversified geographical distribution of outward FDI from developing countries.

While this represents a mere 5 per cent of the global stock of outward FDI, it corresponds to about 50 per cent of the stock of FDI from developing countries.

In both cases, FDI from developing countries is likely to be underestimated in the case of the figure based on outward data ( 859 billion), outward FDI stock may not be fully reported by some offshore financial centres and in that of the figure based on inward data ( 877 billion), information on the sources of FDI is not available for those centres.

In 2002, services accounted for about 55 per cent of the total stock of inward FDI in developing countries and some 85 per cent of outward FDI stock for developing countries.

Sauvant K (2005). New sources of FDI The BRICs Outward FDI from Brazil, Russia, India and China. Paper delivered to seminar Global Players from Emerging Markets , São Paulo, Brazil, 30 May.

In view of the emerging trend of increasing outward FDI from developing countries this development could also be further analyzed.

In view of the emerging trend of increasing outward FDI from developing countries this development could also be further analyzed.

A panel of experts on FDI presented data related to the growth of FDI outflows from developing countries, this growth being fastest in the Asia Pacific region, which now accounted for nearly three quarters of developing country outward FDI stock.

The subregion South, East and South East Asia alone accounts for almost three quarters of all outward FDI from developing countries.

For example, the Government of China is promoting outward FDI by providing loans on preferential terms, tax rebates and investment insurance.

From the home country perspective, an often debated question is whether outward FDI complements or substitutes for exports and or employment.

In Malaysia, for example, there are different instruments aimed at promoting outward FDI, often as part of wider export promotion efforts.

For recent trends, see China An emerging FDI outward investor , UNCTAD e Brief, UNCTAD PRESS EB 2003 08, 3 December 2003.