Recent Global Trends in FDI Flows under Globalized Trade Regime: Prospects and Challenges

Abstract

The present study examines the recent trends in FDI inflow and outflow, both flows and stocks as an instrument of economic growth as well as its international economic integration, taking developed, developing and transitional countries across the world as the case studied. In its first component, it examines the literature in its theoretical- cum- historical aspects. In the section that follows, it takes up the statistical aspects. It uses the annual time series data to explore the relationship between FDI and the growth rate of the GDP, under globalized trade regime. The results of multivariate linear regression model of FDI show that global GDP, trade openness, infrastructural developments, and human capital are the important macroeconomic determinants and pull factors whereas geopolitical tensions are impediment factor for FDI flows across the world. The findings of the linear trend line regression equations show that growth of FDI inflow and outflow of both stocks and flows is significantly rising among developing and transitional nations across the world.