Impact of Foreign Direct Investment. Essay

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The fDi reporT 2013 Global greenfield investment trends The fDi RepoRT 2013 1 ExECUTIvE SUMMARy Executive summary The slow recovery in greenfield FDI in 2011 ground to a halt in 2012, with the second biggest decline in FDI since the start of the world recession. All global regions experienced a decline in FDI. The main exceptions were Chile, Spain, Indonesia, Poland and Oman, all of which experienced strong growth in inward FDI. Chile replaced Brazil this year as the star performer. Investment to Chile is driven by sustained 5%-plus GDP growth rates and an influx of renewable energy investments attracted by Chile’s excellent conditions for solar power and electricity demand from the mining sector. In North America, most states and provinces experienced a decline in FDI, with Michigan the outstanding exception achieving a 60% growth in FDI projects. Alabama also achieved strong growth. The two states’ excellent performances reflect the rebound of the automotive sector in the US. This edition of The fDi Report has a special focus on the BRIC economies of Brazil, Russia, India and China. In recent years these countries have attracted more than 22% of global FDI projects, however, their share declined in 2012 to 17.6%. FDI into China, India and Russia peaked in 2008 and has not recovered since. FDI into Brazil, after a record high in 2011, experienced a decline in 2012. The number of FDI projects in China and Russia in 2012 was the lowest in the past decade. With Brazil struggling to regain growth, Russia muddling along, and growth levels in China and India falling, we expect the market share of BRICs in global FDI to continue to decline in 2013. This fDi Report also focuses on tax and FDI, showing that multinational enterprises minimise their tax burden through overseas operations and giving new evidence of the strong link between corporate tax rates and
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