NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Role of Foreign Direct Investment in International Capital Flows

Robert E. Lipsey

NBER Working Paper No. 7094 (Also Reprint No. r2270)
Issued in June 2000
NBER Program(s):   ITI

Direct investment has accounted for about a quarter of total international capital outflows in the 1990s and appears to have grown, relative to other forms of international investment, since the 1970s. The United States was by far the major source of direct investment outflows in the early 1970s, but Europe caught up to the United States in the 1980s and Japan almost did, before fading in the 1990s. The United States shifted from being the largest net supplier of direct investment to absorbing much of the world's supply, especially in the late 1980s, and then reverted to its earlier net supplier role. Direct Investment flows have been the least volatile source of international investment for most countries, the chief exception being the United States, which has flipped back and forth from dominant net supplier to dominant net recipient, and back to dominant net supplier. Particularly for developing countries, direct investment has been the most dependable source of foreign investment.

download in pdf format
   (138 K)

email paper

A non-technical summary of this paper is available in the October 1999 NBER digest.  You can sign up to receive the NBER Digest by email.

This paper is available as PDF (138 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w7094

Published:

Users who downloaded this paper also downloaded these:
Lipsey, Feenstra, Hahn, and Hatsopoulos The Role of Foreign Direct Investment in International Capital Flows
Lipsey w8084 Foreign Direct Investors in Three Financial Crises
van Wincoop and Tille w12856 International Capital Flows
Goldstein and Razin w11047 Foreign Direct Investment vs. Foreiegn Portfolio Investment
Blonigen and Piger w16704 Determinants of Foreign Direct Investment
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us