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The effect of COVID-19 on foreign direct investment inflows: stylised facts and some explanations

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  • Imad A. Moosa

    (Kuwait University)

  • Ebrahim Merza

    (Kuwait University)

Abstract

The COVID-19 pandemic has impacted every aspect of our lives. The economic effects include the adverse consequences for economic growth, international trade, and foreign direct investment. This paper presents stylised facts about the fall and rebound of FDI inflows as a result of the pandemic. The effects of COVID-19 are considered from three angles: macroeconomic shocks to the economy, theories of foreign direct investment, and studies of the economic effects of disasters and crises. The change of heart away from globalisation and deindustrialisation may discourage FDI flows, which have already been undermined by other factors such as the digitisation of the economy and the emergence of Industry 4.0.

Suggested Citation

  • Imad A. Moosa & Ebrahim Merza, 2022. "The effect of COVID-19 on foreign direct investment inflows: stylised facts and some explanations," Future Business Journal, Springer, vol. 8(1), pages 1-12, December.
    • Handle: RePEc:spr:futbus:v:8:y:2022:i:1:d:10.1186_s43093-022-00129-5
    DOI: 10.1186/s43093-022-00129-5
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    1. MS Hosen & SM Hossain & MN Mia & MR Chowdhury, 2024. "The Effects of COVID-19 and the Russia-Ukraine War on Inward Foreign Direct Investment," Papers 2401.03096, arXiv.org.
    2. Martin Paul Jr. Tabe-Ojong & Emmanuel Nshakira-Rukundo & Bisrat Haile Gebrekidan, 2023. "COVID-19 and food insecurity in Africa: A review of the emerging empirical evidence," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(3), pages 853-878.

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