Foreign Direct Investment Fuels Global Growth

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Companies invested $100 billion in operations in emerging economies in 1995, compared with $22 billion in new portfolio equity investments. FDI is the largest item in all net private capital flows to developing countries.

One of the clearest signs of the globalization of the world economy is the surge in foreign direct investment (FDI), as more and more corporations establish or expand their operations outside their home countries. Developed nations such as the United States still receive the bulk of this inward flow of private capital, but developing economieswhich once were only marginal beneficiaries of crossborder investments-are moving to the forefront of this trend. …