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Investigating the Structure and Policy Implications of the Global FDI Network

Author

Listed:
  • Samani Habib Ansari

    (Yazd University)

  • Pour Afrooz Sadat Foroughi

    (Yazd University)

  • Zare Mohammad Hassan

    (Yazd University)

  • Shabani Zahra Dehghan

    (Shiraz University)

Abstract

Foreign direct investment (FDI) plays a vital role in financing projects and generating spillover effects such as technology transfer and human capital development. This study analyzes FDI interactions among 193 countries from 2011 to 2021 by constructing inward and outward FDI networks. Using clustering coefficients, centrality measures, and community detection, the research examines the structural features of these networks. Results show that the United States, the United Kingdom, Luxembourg, and the Netherlands consistently hold central positions. Over time, the number of communities decreased while their size increased, with key FDI countries placed in the same community. Employing the GMM method, the study identifies significant determinants of network positions: trade openness, free-trade agreements, and GDP positively affect both inflow and outflow networks. Inward positions are further strengthened by good governance but weakened by inflation. Conversely, in outward networks, inflation boosts FDI, while governance has a negative impact.

Suggested Citation

  • Samani Habib Ansari & Pour Afrooz Sadat Foroughi & Zare Mohammad Hassan & Shabani Zahra Dehghan, 2026. "Investigating the Structure and Policy Implications of the Global FDI Network," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 41(2), pages 235-272, June.
    • Handle: RePEc:ris:integr:022614
    DOI: 10.11130/jei.2025028
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    Keywords

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    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • B55 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Social Economics
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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