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Global Foreign Direct Investment: A network perspective

Author

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  • Bolívar, Luis Miguel
  • Casanueva, Cristóbal
  • Castro, Ignacio

Abstract

Foreign Direct Investment (FDI) research has usually focused on inward and outward levels of assets flows and stocks, yet very few studies have examined the Global FDI Network. We study the economic performance of countries in terms of their associations with certain FDI partners employing social network analysis. This new approach shifts the focus away from the study of certain country features and their influence on FDI stock levels. Our study of FDI stocks from 229 economies sheds light on the interactions of the global FDI network within its singular context of country-level determinants, its after-effects, internal patterns, and relationship with the network of Bilateral Investment Treaties (BITs). Our conclusion is that country features such as size, openness, skill levels, and institutional stability not only set the pace of FDI, but that they also influence both the network structure and the power positions of each node. We investigate whether that structure responds to homophilic relations between countries or to core–periphery patterns with only a few core economies and we question the strategy of signing BITs to form FDI relations. Finally, we inquire into strategic connections with powerful partners, to ascertain whether they provide beneficial settings for country growth and trade performance.

Suggested Citation

  • Bolívar, Luis Miguel & Casanueva, Cristóbal & Castro, Ignacio, 2019. "Global Foreign Direct Investment: A network perspective," International Business Review, Elsevier, vol. 28(4), pages 696-712.
    • Handle: RePEc:eee:iburev:v:28:y:2019:i:4:p:696-712
    DOI: 10.1016/j.ibusrev.2019.01.007
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    Citations

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    Cited by:

    1. Xiao, Shufeng & Tian, Xiaocong, 2023. "Performance feedback and location choice of foreign direct investment," International Business Review, Elsevier, vol. 32(4).
    2. Park, Sangjin & Yang, Jae-Suk, 2021. "Relationships between capital flow and economic growth: A network analysis," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 72(C).
    3. Scott-Kennel, Joanna & Saittakari, Iiris, 2020. "Sourcing or sharing in MNE networks? National headquarters and foreign subsidiaries as knowledge conduits in SMOPECs," International Business Review, Elsevier, vol. 29(1).
    4. Sultana, Nasrin & Turkina, Ekaterina, 2020. "Foreign direct investment, technological advancement, and absorptive capacity: A network analysis," International Business Review, Elsevier, vol. 29(2).
    5. Kurt, Yusuf & Kurt, Mustafa, 2020. "Social network analysis in international business research: An assessment of the current state of play and future research directions," International Business Review, Elsevier, vol. 29(2).
    6. Hock Tsen Wong, 2022. "Asymmetric Real Exchange Rate and Foreign Direct Investment Determinants: An Empirical Study of Malaysia," Capital Markets Review, Malaysian Finance Association, vol. 30(2), pages 19-37.
    7. Callaghan, Christian William, 2021. "Consequences of deindustrialisation for globalisation: Insights for international business," International Business Review, Elsevier, vol. 30(3).

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