Foreign Direct

Investment Flows
Around the World
Tiffani Daturara Bari - 201610829

Table of
Content
1. Introduction
2. Motives and Advantages of FDI
3. Patterns of FDI flows around the
world
4. FDI in Indonesia
5. Conclusion

What is Foreign
Direct
Investment ?
Cross-border investment associated with a resident
in one economy having control or a significant
degree of influence on the management of an
enterprise that is resident in another economy.
Ownership of 10 percent or more of the ordinary
shares of voting stock is the criterion for
determining the existence of a direct investment
relationship.

Motives of
Foreign Direct
Investment
1. Resource Seeking
2. Market Seeking
3. Efficiency Seeking
(Dunning, 1993)

Advantages of
FDI for Home
Countries

1. Reduce the risk faced by owners of capital by

allowing them to diversify their lending &
investment
The spread of best practices in corporate
governance, accounting rules & legal tradition
The global mobility of capital Limits the
ability of governments to pursue bad
policies
IMF (2001)

Advantages of FDI for

Host Countries
1. Transfer of technology
Gain employee training
Contribute to corporate tax revenues in the
host countries
IMF (2001)

Patterns of FDI around

the World

The
Inflows

FDI Inflows Global and by Group of

Economies 1995-2014
(Billions of Dollars)

The
Outflows

FDI Outflows :
Top 20 Home Economies
2013-2014
(Billions of Dollars)

UNCTAD, World Investment Report

2015

Foreign Direct Investment

in Indonesia

Indonesia
is an archipelago comprising 17,508 islands - 33 provinces - 250 million
people .
founding member of ASEAN
member of the G-20 major economies.
Southeast Asia's largest economy.
Resilient economic growth, low government debt and prudent fiscal
management have been cited as reasons for the upgrades and keys in
attracting financial inflows into Indonesia. These FDI inflows, which had
been relatively weak for Indonesia during the decade after the
Asian Financial Crisis had seriously shaken up the foundations of the country,
showed a steep increase after the global financial crisis of 2008-2009.
The Global Alliance of SMEs

Indonesia Investment
Coordinating Board (BKPM)

Indonesia Investment
Coordinating Board (BKPM)

Conclusion
The flows of FDI
around the world
are very volatile
The financial crisis
has a big influence
on the patterns of
FDI around the
world

At the beginning
inflows of FDI have
gone to the
developed
countries, then
shows a significant
decrease since
2009, while inflows
to developing
countries remained
at historically high
level.

For the outflows of

FDI, developed
countries still
dominating, with
U.S rated first.
However nowadays
more developing
countries are
becoming home
countries especially
China.