Publication: The Impact of COVID 19 on Foreign Investors: Evidence from the Quarterly Global Multinational Enterprise Pulse Survey for the First Quarter of 2021
Date
2021-06
ISSN
Published
2021-06
Author(s)
Saurav, Abhishek
Kusek, Peter
Kuo, Ryan
Viney, Brody
Abstract
As the Coronavirus (COVID-19) pandemic
enters its second year, foreign investors can see light at
the end of the tunnel as economic conditions improve.
Results from the latest round (Q1 2021) of World Bank
Group’s quarterly pulse surveys of Multinational Enterprise
(MNE) affiliates suggests that most firms are still
operating below full capacity. The pandemic’s adverse
effects on MNEs in developing countries continued to ease in
the first quarter of 2021 (Q1 2021). Impacts remained
widespread with 93 percent experiencing at least one adverse
impact, but fewer firms report negative demand, output,
revenue, and profit impacts (relative to Q1 2020) than in
prior survey rounds. The average magnitude of these impacts
was also more limited and continued to ease from Q4 2020.
The longer-term outlook for foreign investment in developing
countries remains subdued. Overall, 92 percent of firms
report that their foreign parent had no plans to change
(increase or decrease) the company’s level of investment
over the next 1-3 years. Uncertainty about future demand is
the key factor holding investment back, but policy and
regulatory restrictions are also a factor for almost half of
firms. Survey results confirmed that almost all MNE
affiliates have increased their adoption of digital
technologies for remote working, e-commerce, and supply
chain management in response to the pandemic. Half of MNE
affiliates also report increasing their focus on
sustainability and decarbonization of products and services,
with foreign parent companies again playing a critical role.
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; Kuo, Ryan; Viney, Brody. 2021. The Impact of COVID 19 on Foreign Investors: Evidence from the Quarterly Global Multinational Enterprise Pulse Survey for the First Quarter of 2021. © World Bank, Washington, DC. http://hdl.handle.net/10986/35803 License: CC BY 3.0 IGO.”