Emerging Trends in Global Foreign Direct Investment

Special Issue Editor


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Guest Editor
School of Finance and Management, SOAS University of London, London WC1H 0XG, UK
Interests: financial economics; comparative financial systems; firm investment decisions under uncertainty; capital market imperfections; corporate finance; corporate governance; the Chinese financial system and the Chinese economy
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Special Issue Information

Dear Colleagues,

The recent decline in global Foreign Direct Investment (FDI) can be attributed to uncertainties surrounding weak economic growth and geopolitics. Indeed, geopolitics has become increasingly significant in influencing global capital flows. The international community, including the US, EU, UK, and other OECD countries, has enhanced its regulatory scrutiny of FDI due to national security concerns. Geopolitics has also intensified trade wars and the competition for critical resources, resulting in a revamp of global supply chains. A divide between the Global South and Global North and the regionalization of trade and investment have emerged. These changes challenge established FDI theories. For example, conventional market-seeking cannot explain why a firm invests in country A not because of country A’s market size, but to gain access to country B’s market. Crucially, if geopolitics outweighs economic concerns, what can drive private capital to flow to the most profitable locations and projects? Against this background, this Special Issue seeks an in-depth understanding of the emerging trends in global FDI.

Prof. Dr. Hong Bo
Guest Editor

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Keywords

  • foreign direct investment (FDI)
  • geopolitics
  • global supply chains
  • FDI screening
  • trade wars
  • location decision of FDI
  • industry structure of FDI
  • COVID-19

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Published Papers (2 papers)

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Research

22 pages, 455 KiB  
Article
Research on the Reverse Technology Spillover Effect from China’s CVC Overseas Investments
by Xiaoli Wang and Yi Tan
Int. J. Financial Stud. 2025, 13(2), 63; https://doi.org/10.3390/ijfs13020063 - 14 Apr 2025
Viewed by 382
Abstract
China’s corporate venture capital (CVC) overseas investment began in the late 20th century and has expanded significantly over the years. By 2021, more than 265 Chinese institutions and companies had engaged in cross-border investments, contributing over USD 100 billion. These investments present a [...] Read more.
China’s corporate venture capital (CVC) overseas investment began in the late 20th century and has expanded significantly over the years. By 2021, more than 265 Chinese institutions and companies had engaged in cross-border investments, contributing over USD 100 billion. These investments present a unique opportunity to examine the reverse technology spillover effect on China’s technological development. Using a Difference-in-Differences model and regression analysis, we investigate whether China’s CVC overseas investments drive technological progress. Our findings reveal three key insights: (1) these investments have a positive impact on China’s technological advancement, (2) the effect is stronger when the host country has a higher level of technology, and (3) larger investment amounts amplify the impact. This research not only highlights the transformative potential of cross-border CVC investments but also demonstrates how enterprises can leverage reverse innovation spillovers to accelerate China’s technological progress. Additionally, we introduce a novel approach to studying this phenomenon, contributing to the existing scholarship on global innovation dynamics. Full article
(This article belongs to the Special Issue Emerging Trends in Global Foreign Direct Investment)
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22 pages, 356 KiB  
Article
How Foreign and Domestic Ownership Influenced Risk-Taking in GCC Banks
by Abdullah Aldousari, Ahmed Mohammed and Sarah Lindop
Int. J. Financial Stud. 2025, 13(1), 33; https://doi.org/10.3390/ijfs13010033 - 2 Mar 2025
Viewed by 851
Abstract
This study investigates the relationship between ownership structure (foreign and domestic) and bank risk-taking over the period 2014–2022. The analysis includes 66 banks operating in the GCC, divided into 44 domestically owned, and 22 foreign-owned banks. The research examines the relationship across two [...] Read more.
This study investigates the relationship between ownership structure (foreign and domestic) and bank risk-taking over the period 2014–2022. The analysis includes 66 banks operating in the GCC, divided into 44 domestically owned, and 22 foreign-owned banks. The research examines the relationship across two distinct periods: the pre-pandemic and the COVID-19 pandemic era, using the two-stage least squares (2SLS) method, and panel data techniques for robust analysis. The findings reveal that, in both periods, foreign-owned banks exhibited lower credit risk, greater cost efficiency, and less risk-taking compared to domestic counterparts. Domestic banks, while maintaining profitability, relied heavily on capital absorbency, which resulted in elevated credit risk and operational inefficiencies. These inefficiencies, observed among domestic banks, stem from inadequate monitoring of borrowers’ information and the occurrence of moral hazard. Foreign banks played a crucial role in supporting banking sector stability, as their presence enhanced the GDP growth. The results are in line with the “global advantage hypothesis”. Full article
(This article belongs to the Special Issue Emerging Trends in Global Foreign Direct Investment)
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