From financial crisis to global recovery

From financial crisis to global recovery Essay example
Masters
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Finance & Accounting
Pages 12 (3012 words)
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Name: Institution: Abstract: The global foreign direct investment flows declined during the recent economic crisis. However, the FDI flows are currently increasing due to slow recovery of the global economy. The Spanish crisis was mainly caused by the collapse of the construction and real estate sector, the high employment and banking system losses…

Introduction

Despite the global economic turmoil, the global FDI inflows rose significantly by 17 percent in 2011 in most of the economies to $ 1.5 trillion. The FDI flows increased in major economic groupings such as developing economies, transition economies and developed economies. Developing and transition economies recorded $ 755 Billion FDI inflows that were driven mainly by robust investments (Lapavitsas, 2012). FDI flows in Europe increased by 18 percent while the flows in the United States declined by 8 percent. Ireland experienced the largest FDI flows due to movements in debt and equity financial markets. The increase in FDI flows in Europe was mainly driven by cross-border corporate restructuring, mergers and acquisitions, and stabilization of the economies (Ramamurti & Hashai, 2011). However, this trend was not even in all European countries since Greece and Germany experienced a decline while countries like France saw an increase in FDI flows. Developing counties accounted for most of the global FDI flows in the first half of 2011 (Shambaugh, 2012). The FDI inflows in developing countries were at $ 684 billion. The FDI flows in transition economies rose by 6 percent in 2011 to reach $ 92 billion. ...
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