The region also registered the sharpest rise at +160% last year from 2014 inflows, driven mainly by more than +250% jump in FDI to the U.S.<\/em><\/p>\n Notwithstanding debt woes, the European Union registered a +50% surge and Switzerland received a +886% rise to $69 billion.<\/p>\n Reversing a nearly five-year-old trend, developed economies collectively received the greater share <\/em>(55%) of global FDI flows in 2015 versus the preceding year\u2019s 41%. The spurt of FDI into advanced economies was largely due to cross-border mergers and acquisitions, particularly in the U.S.<\/p>\n On the other hand, developing economies (excluding Caribbean financial centers) experienced a +9% increase, but flows to transition economies plunged -38% from 2014 levels.<\/p>\n FDI flows to Developing Asia rose around +16%. On the other hand, commodities and energy price routs discouraged foreign investments in Africa (~ -7%), Latin America and the Caribbean (~ -2%).<\/p>\n Data Source: UNCTAD <\/em><\/strong><\/span><\/p>\n Harbingers of Future Growth<\/strong><\/p>\n Usually a long-term investment, FDI occurs in the following alternative ways\u2014a foreign company acquiring shares of, and\/or expanding operations of a domestic entity; the overseas company setting up its subsidiary in the target country; or, a cross-border merger. In the process, technologies and skills exchanged between the two entities can potentially lead to efficiency gains, more employment opportunities and improved profitability\u2014benefits which may not just be restricted to the recipient firm\/subsidiary alone.<\/p>\n FDI contributed to around 12 million U.S. jobs in 2013\u2014consisting of 6.1 million directly employed by foreign-owned entities plus 5.9 million jobs indirectly attributable to foreign investments via by-products, like productivity gains and supply chains.<\/p>\n Majority-owned U.S. affiliates of foreign entities accounted for $53 billion investment in R&D in 2013, which is 16.4% of total American R&D expense by businesses that year, underscoring FDI\u2019s importance in sustained economic growth.<\/p>\n Also, emerging countries are fast capturing global investors\u2019 attention owing to their growing market and rapid urbanization. The Indian aviation sector, for example, has reaped substantial gains, with FDI leading to the launch of two airlines, Vistara and Air Asia India, and to Etihad\u2019s purchase of a 24% stake in Jet Airways. The developments have facilitated expansion of international air traffic from the country and operations from several new cities.<\/p>\n Bottom Line for Investors<\/strong><\/p>\n Even though current global weakness is predicted to slow foreign capital flows globally in 2016, last year\u2019s record foreign investments, particularly in developed economies including the U.S., should potentially provide adequate support for companies\u2019 long-term prospects. Furthermore, by 2018, global FDI flows are predicted to exceed $1.8 trillion on the back of an expected global economic recovery.<\/p>\n As for Corporate America in particular, recent regulatory challenges may have restricted certain cross-border deals this year, but prospects of real growth offered by firming domestic fundamentals and an expected rebound in corporate earnings by end of the fourth quarter augurs well for returns on existing FDIs and add to U.S. companies\u2019 appeal to global investors looking forward.<\/p>\n \n","protected":false},"excerpt":{"rendered":" Amidst all the gloom surrounding global economic woes this year, many people overlooked some silver linings\u2014one of them being 2015\u2019s […]<\/p>\n","protected":false},"author":1,"featured_media":4124,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,72],"tags":[],"class_list":["post-3353","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investor-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/3353","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=3353"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/3353\/revisions"}],"predecessor-version":[{"id":11282,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/3353\/revisions\/11282"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=3353"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=3353"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=3353"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![FDI_2016-07-15_Image_1_o_2.png](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/FDI_2016-07-15_Image_1_o_2.png\")
Data Source: UNCTAD<\/span><\/strong><\/p>\n![FDI_2016-07-15_Image_2_of_2.png](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/FDI_2016-07-15_Image_2_of_2.png\")
<\/p>\n