Supply-chain disruptions and new investment policies in the post-COVID-19 world
Organisation for Economic Co-operation and Development, Paris
OECD Publishing - Paris
2023
41 p.
investment policy ; value chains ; foreign investment ; relocation of industry ; globalization ; epidemic disease
OECD Working Papers on International Investment
2023/01
Financing and monetary policy
https://doi.org/10.1787/5fcc2892-en
English
Bibliogr.
"The COVID 19 pandemic has inflicted a series of shocks on the global economy, not least impacting global trade and investment. During the same time, several countries adopted new foreign direct investment (FDI) related policies. This paper presents novel preliminary evidence on the effects of these new FDI policies and COVID-19-related supply-chain disruptions on cross-border investment. It employs, among others, granular data on FDI policies and investment projects undertaken in a wide range of sectors in 175 host economies worldwide by investors from 46 home countries. It finds that a combination of FDI policies and COVID-19-related measures has a statistically significant and economically meaningful negative effect on the probability of a new cross-border greenfield investment project occurring during the sample period. The effect is the strongest in sectors with high R&D intensity."
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