Ratios of inward and outward FDI stock to GDP, and FDI flows to gross fixed capital formation are tabulated for most countries in the various World Investment Reports of UNCTAD. They also calculate a "transnationality index" of FDI host countries, which averages the four shares: FDI flows (as a percentage of GFCF), FDI inward stocks as a percentage of GDP, value added of foreign affiliates as a percentage of GDP, and employment of foreign affiliates as a precentage of total employment. The developed countries which the 2000 report tabulates (with New Zealand at the top!) average around 13%, and the tabulated developing countries 14%.
Unfortunately they don't seem interested in tabulating profits! It's difficult to say what profit figures would show. The ability of TNCs to transfer their profits from one country another for tax, political or internal reasons must make the profit attributed to their operations in any one country arbitrary to a degree. Even without deliberate transfer pricing, it is conceivable that (say) Nike would put up with lower rates of profit in Indonesia because the manufacture of its shoes is such a small part of the cost. Most of the profits may well be made elsewhere in the chain of distribution and sale. I'm not saying that it necessarily happens like that, but it is quite conceivable. To say TNCs chase cheap labour is to oversimplify. Certainly that is an important part of their motivation, but since around 76% of FDI was to developed countries (in 1999) - and 90% of mergers and acquisitions - it isn't the whole story. Other motivations include domination of their selected markets, increasing scale for competitive reasons, and security of investment. Profits aside, two features of FDI which seem to clearly differentiate developed and developing countries (in the context of the US foreign investment thread, imperial vs neo-colonies) appear to be the balance between inward and outward investment stock (biased towards outward for developed countries; overwhelmingly inward for developing); and greenfield vs mergers/acquisition investment (over 80% of FDI was M&As for all countries in 1999; but about one third of FDI to developing countries). Grant Lee remarks below that Singapore's "inward FDI is still well above outward FDI in this city-state where annual trade is also 160% !!! of GDP". Singapore has unusually high FDI, but its high level of trade is no mystery. Like Hong Kong, it has a huge entrepot function, with high levels of "re-exports" - importing for the purpose of re-exporting with little or no work done on the goods on the way through. In 1999 Hong Kong (popn about 6 million) had the world's 10th largest international trading volume (mainland China was 9th). In 2000 88.5% of its exports were re-exports, a third of these to mainland China. Its foreign investment is even more remarkable (and statistics-distorting!): with the exceptions of China and its former colonial master, the U.K., the top-ranked sources and destinations of Hong Kong investment are the tax havens of the British Virgin Islands, the Cayman Islands, and Bermuda (1998 figures). The ownership of this investment is certainly elsewhere, including the U.S., Europe, Hong Kong itself, and China. Bill Grant Lee wrote: > > Bill Burgess <[EMAIL PROTECTED]> wrote: > > > country inward FDI stock/GDP outward FDI stock/GDP > > Canada 23.9% 26.9% > > Australia 28.1 17.1 > > UK 23.3 35.9 > > France 11.7 15.9 > > Singapore 85.8 56.1 > > Malaysia 67.0 22.7 > > Indonesia 73.3 2.4 > > Argentina 13.9 5.4 > > Brazil 17.1 1.4 > > Interesting figures. I haven't had time to look at the comparable figures > for other countries. In any case they don't prove a permanent/structural > exclusion from "imperial" activity. For example, what about Hong Kong > (pre-1997, not that it is yet a homogenous part of China)? The last I heard > there was hardly any manufacturing left in Hong Kong because proprietors had > shifted operations to the mainland. South Africa? Saudi Arabia? > > > Note the > > obvious difference in rates of outward FDI, plus the fact that most FDI by > > Canada, France, etc. is in other imperialist countries while most FDI by > > Indonesia, Argentina, etc. is in fellow semi-colonies. > > Every bourgeoisie has to start somewhere. For example --- and I'm not going > to revisit the complexities and vitriol of the "Kenya Debate" --- but I just > came across this on the web: > > Andrea Goldstein and Njuguna S. Ndung'u, OECD Development Centre Technical > Paper No. 171: "New Forms Of Co-Operation And Integration In Emerging Africa > Regional Integration Experience, March 2001. > > quote: (p. 16) Table 5. Import Sources (1997)* > > (From) Kenya Tanzania Uganda > > (To) Kenya - 0** 0** > Tanzania 10.4 - 0 > Uganda 25.9 0** - > > * These are percentages of total imports for the respective country. > **The percentages are very small. > Source:Report of the permanent Tripartite Commission for East African > Co-operation: 1996-98. > > Obviously exports are not investment but the above suggests one reason why > (p. 24) "... there are also restrictions on Kenyan investment in Uganda and > Tanzania..." (24) > > > Singapore's inward > > and outward rates are both high, but note that inward FDI is still well > > above outward FDI in this city-state where annual trade is also 160% > > !!! of GDP. > > That trend is not unusual for countries with small populations and highly > developed economies. What are the comparative figures for Belgium and > Switzerland? > > Regards, > > Grant.
