Shifting Shores: FDI Relocations and Political Risk

Publication:
Shifting Shores: FDI Relocations and Political Risk

dc.contributor.author	Nebe, Moritz
dc.contributor.author	Economou, Persephone
dc.contributor.author	Abruzzese, Leo
dc.date.accessioned	2024-12-10T15:40:20Z
dc.date.available	2024-12-10T15:40:20Z
dc.date.issued	2024-12-10
dc.description.abstract	Foreign direct investment (FDI) has powered prosperity in developing countries for decades. Yet FDI, once a reliable contributor to economic growth, a conduit for the transfer of technology and innovation, and a link to domestic and international markets, has slowed in recent years as shocks have multiplied. Global commercial competition, supply chain disruptions during and after the pandemic, less efficient transportation and shipping routes due to conflicts, and policies aimed at encouraging investment at home are increasingly shaping the flow of FDI. A half-century of global economic integration, driven by trade and FDI and the search for markets, natural resources, and low labor and input costs, is shifting to a more uncertain investment environment. This new world of FDI is increasingly defined by near-shoring, friend-shoring, and reshoring, each a way to gain greater control and ensure the resilience of supply chains and access to markets. As a result, FDI is relocating, with the shifts influenced by factors determined by geopolitical proximity and traditional location-specific determinants. Consequently, some emerging markets and developing countries (EMDEs) may attract less FDI, while others stand to benefit from their geopolitical or trade alliances. Although anecdotal reports of FDI relocation in specific countries are common, the scope of this trend remains uncertain. Questions such as the extent of FDI relocations, the permanence of these trends, and which countries stand to benefit the most are yet to be fully answered. To help understand these developments and the challenges they raise, this report presents new evidence based on the findings of a survey of investment promotion agencies. These national organizations shepherd billions of dollars of FDI annually through the global economy. We also examine FDI shifts through third countries for geopolitical reasons. The conclusions suggest that nearshoring and friend-shoring-driven relocations are increasingly shaping the FDI landscape.	en
dc.identifier	http://documents.worldbank.org/curated/en/099537312102490068/IDU1484dd6fb127f2140761912619f97768c1f5b
dc.identifier.doi	10.1596/42521
dc.identifier.doi	https://doi.org/10.1596/42521
dc.identifier.uri	https://hdl.handle.net/10986/42521
dc.language	English
dc.language.iso	en_US
dc.publisher	MIGA, World Bank, Washington DC
dc.rights	CC BY-NC 3.0 IGO
dc.rights.holder	Multilateral Investment Guarantee Agency (MIGA)
dc.rights.uri	https://creativecommons.org/licenses/by-nc/3.0/igo
dc.subject	FDI
dc.subject	DEVELOPING COUNTRIES
dc.subject	FDI RELOCATIONS
dc.subject	POLITICAL RISK INSURANCE
dc.subject	TRENDS AND EMERGING PATTERNS
dc.subject	GEOPOLITICS
dc.title	Shifting Shores	en
dc.title.subtitle	FDI Relocations and Political Risk	en
dc.type	Report
dspace.entity.type	Publication
okr.date.disclosure	2024-12-10
okr.date.doiregistration	2025-04-14T11:49:06.753721Z
okr.date.lastmodified	2024-12-10T00:00:00Z	en
okr.doctype	Report
okr.docurl	http://documents.worldbank.org/curated/en/099537312102490068/IDU1484dd6fb127f2140761912619f97768c1f5b
okr.guid	099537312102490068
okr.identifier.docmid	IDU-484dd6fb-27f2-4076-9126-9f97768c1f5b
okr.identifier.externaldocumentum	34433988
okr.identifier.internaldocumentum	34433988
okr.identifier.report	195453
okr.import.id	5990
okr.imported	true	en
okr.language.supported	en
okr.pdfurl	http://documents.worldbank.org/curated/en/099537312102490068/pdf/IDU1484dd6fb127f2140761912619f97768c1f5b.pdf	en
okr.region.geographical	World
okr.topic	International Economics and Trade::Foreign Direct Investment
okr.unit	Economics Unit (MIGEC)