United Nations Reports: Foreign Direct Investment Peaks, Future Investments
Texas A&M International University, Laredo, TX – According to two major
reports to be released in the US at Texas A&M International University
in Laredo and around the world simultaneously on Wednesday,
the interconnectivity that fires the global economy is increasingly apparent.
The research reports, anticipated by global corporate executives and policy
makers around the world involved in foreign investment decisions, shows that
the blazing Foreign Direct Investment (FDI) of 2007 has cooled considerably
in response to economic downturn and financial instability, but continues
to be a major engine of economic growth in the long run.
The research indicates that global FDI inflows rose in 2007 by 30% to reach
an all-time high of $1,833 billion, surpassing the previous record set
in 2000, despite the global financial and credit crises which began in the
second half of 2007.
These and other findings were published in two reports, the World
Investment Report 2008: Transnational Corporations and Infrastructure Challenge
and World Investment Prospects Survey 2008-2010, both released worldwide today
by the United Nations Conference on Trade and Development (UNCTAD) in Laredo
and around the world.
Researcher Dr. Tagi Sagafi-nejad, distinguished professor at Texas A&M International
University’s A. R. Sanchez Jr. School of Business, said that while the peak is
impressive, the continued global business climate appears to augur lower FDI
activity for 2008.
“The upward trends are apparent, with FDI inflows to developing countries
amounting to about $1,248 billion. The US remains the largest recipient country
of inflows. FDI outflows from developed countries are growing even faster
than their inflows, exceeding them by $445 billion in 2007.
“That said, the sub-prime mortgage crisis has clearly affected world financial
markets and created liquidity problems which have lead to higher credit
costs. Recent news of the collapse of Lehman Brothers and federal bailouts
of Fannie Mae and Freddy Mac, as well as AIG, will likely further discourage
“The weakening dollar has actually helped to stimulate FDI into the US,
but the overall downturn seen in our World Investment
Prospects Survey shows
large transnational corporations (TNCs) being more cautious about their medium-term
FDI ambitions,” Dr. Sagafi-nejad said.
Sagafi-nejad noted that while those investments may be cautious, they are
expected to be moderate over the next three years. This caution for moderation
in FDI will be balanced with the persisting trend of TNCs expanding production,
employment and sales abroad.
“If we look at an analysis by home region, we’re seeing that international
ambitions are quickly growing in companies from the developing world, particularly
Asia. FDI prospects for developed countries, especially North America and
Japan, have dimmed compared to a year ago,” he explained.
The Investment Prospects Survey indicates that the most attractive destinations
for future foreign investment are China, India, the US, the Russian Federation
and Brazil, all rankings unchanged from last year.
The most important factors that continue to guide choices in investment
location include market growth, size and access to international/regional
markets while the quality of business environment, availability of skilled
labor, suppliers, infrastructure, legal environment and government effectiveness
The World Investment Report and its database are available online at http://www.unctad.org/wir and http://www.unctad.org/fdistatistics.
The World Investment Prospects Survey 2008-2010 can be obtained at http://www.unctad.org/en/docs/wips2008_en.pdf
Texas A&M International University is the only US site for release of
For additional information, contact Dr. Tagi Sagafi-nejad at firstname.lastname@example.org or by phone at 956.326.2547.
Texas A&M International University is a State-assisted
university with 78 undergraduate, graduate or doctoral degrees, including
a doctorate in international business offered at the A. R. Sanchez Jr.
School of Business.
Situated on the US-Mexico border, it is part of The Texas
System and home to nearly 6,000 students from over 30 different countries.
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