Publication: World Bank Investor Confidence Survey: Evidence from the Quarterly Global Multinational Enterprises Pulse Survey for the Second Quarter of 2021
Date
2021-11-08
ISSN
Published
2021-11-08
Author(s)
Saurav, Abhishek
Kusek, Peter
Albertson, Mark
Abstract
As economic conditions begin to
improve in the wake of the COVID-19 pandemic, foreign
investors face new challenges that are impeding a complete
recovery. Results from the latest round (Q2 2021) of World
Bank Group’s quarterly pulse survey of Multinational
Enterprise (MNE) affiliates suggests that despite output and
demand reaching pre-pandemic levels on average, most firms
are still facing adverse effects. The share of firms
reporting at least one adverse impact of the pandemic
continued to fall in Q2 to 73 percent compared to 93 percent
in Q1 2021. Within the ten business dimensions measured,
employment and investment saw the largest improvement from
Q1, but new challenges are emerging. Worker productivity and
liquidity have emerged, alongside input cost pressures and
supply chain reliability, as areas of concern for a complete
recovery. MNEs’ future investment plans have become slightly
more optimistic, providing early signs of an improvement in
the investment outlook. The share of surveyed MNEs expecting
to increase investment over the next three years has reached
a pandemic high (21 percent) – driven by changes or expected
changes in regulations and policies for foreign investors as
well as insourcing of production. At the same time,
uncertainty remains the primary factor limiting the appetite
of firms to invest. Results also show over half of surveyed
firms were forced to lay off workers during the pandemic,
but recruitment plans over the next three years indicate an
expected net increase in workforce. MNEs are increasingly
looking for highly educated workers with strong managerial,
analytical, and problem-solving skills. While these survey
results may not be generalizable to all developing
countries, they are directionally indicative of MNEs’
experiences in developing countries.
Citation
“Saurav, Abhishek; Kusek, Peter; Albertson, Mark. 2021. World Bank Investor Confidence Survey: Evidence from the Quarterly Global Multinational Enterprises Pulse Survey for the Second Quarter of 2021. © World Bank, Washington, DC. http://hdl.handle.net/10986/36581 License: CC BY 3.0 IGO.”