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The Rising Concentration of Foreign Direct Investment

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  • Ragoussis, Alexandros
  • Rigo,Davide
  • Santoni, Gianluca

Abstract

Using two decades of granular data on foreign direct investments, this study shows a consistent global rise in the concentration of cross-border investments within fewer multinational firms. This concentration is most prominent in developing economies, reaching record highs in recent years. Structural shifts into services do not stand out as the primary driver of variation in investment concentration across countries and over time. Instead, concentration has grown significantly more in destinations facing high economic uncertainty.

Suggested Citation

  • Ragoussis, Alexandros & Rigo,Davide & Santoni, Gianluca, 2024. "The Rising Concentration of Foreign Direct Investment," Policy Research Working Paper Series 10815, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10815
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    References listed on IDEAS

    as
    1. Hites Ahir & Nicholas Bloom & Davide Furceri, 2022. "The world uncertainty index," POID Working Papers 031, Centre for Economic Performance, LSE.
    2. Philippon, Thomas & Gutierrez, German, 2018. "How EU Markets Became More Competitive Than US Markets: A Study of Institutional Drift," CEPR Discussion Papers 12983, Centre for Economic Policy Research.
    3. Gustavo Grullon & Yelena Larkin & Roni Michaely, 2019. "Are US Industries Becoming More Concentrated?," Review of Finance, European Finance Association, vol. 23(4), pages 697-743.
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    Cited by:

    1. Kim, Hee-Eun & Lee, Wonkyung & Moon, Jiyong, 2025. "US economic policy uncertainty and China’s outward investment diversification," Finance Research Letters, Elsevier, vol. 73(C).

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