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Tracking Greenfield FDI During the COVID-19 Pandemic: Analysis by Sectors

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  • Nadia Doytch
  • Nishant Yonzan
  • Ketan Reddy
  • Filip De Beule

Abstract

We study the trends and fluctuations in greenfield foreign direct investment (GFDI) during the first wave of the COVID-19 pandemic crisis on a global scale. We analyse the data of a data set of GFDI provided by fDi Markets ( Financial Times ) to understand the contraction of GFDI during the first three quarters of the year 2020, taking into account the sector of the investment and the host and home country. We analyse both the long-run trends and the quarter-over-quarter changes in GFDI to capture its fluctuations before and during the first wave of the COVID-19 crisis and the 2008 global financial crisis. Our findings cast light on which countries’ and industries’ GFDIs were most affected by the pandemic crisis and draw a comparison to the global financial crisis. To our surprise, many services industries have shown unexpected resilience of GFDI due to the flexibility for remote work. On the contrary, GFDI in the manufacturing industries, as well as the extractives and the utility industries, has shown a dramatic decline during the pandemic. These contractions raise questions of stability and resilience of the global supply chains these industries are a part of. JEL Codes: F21

Suggested Citation

  • Nadia Doytch & Nishant Yonzan & Ketan Reddy & Filip De Beule, 2021. "Tracking Greenfield FDI During the COVID-19 Pandemic: Analysis by Sectors," Foreign Trade Review, , vol. 56(4), pages 454-475, November.
    • Handle: RePEc:sae:fortra:v:56:y:2021:i:4:p:454-475
    DOI: 10.1177/00157325211031317
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    Cited by:

    1. Roxana Wright & Chen Wu, 2022. "The Uneven Short-Run Effects of the COVID-19 Pandemic on Foreign Direct Investment," JRFM, MDPI, vol. 15(10), pages 1-21, October.
    2. Williams Ohemeng & Kenneth Ofori-Boateng & Elvis Kwame Agyapong & Joseph Darmoe, 2023. "Environmental risk and growth in foreign direct investment: Is the composition of FDI in sub-Saharan Africa a speculative type?," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(2), pages 2243695-224, June.
    3. Klayme, Tania & Gokmenoglu, Korhan K. & Rustamov, Bezhan, 2023. "Economic policy uncertainty, COVID-19 and corporate investment: Evidence from the gold mining industry," Resources Policy, Elsevier, vol. 85(PA).
    4. Majed Alharthi, 2022. "Factors of foreign direct investment inwards: The case of Saudi Arabia," Proceedings of Economics and Finance Conferences 13015491, International Institute of Social and Economic Sciences.
    5. Farris, Jarrad & Morgan, Stephen & Johnson, Michael E., 2022. "COVID-19 Working Paper: The COVID-19 Pandemic and Changes in Greenfield Foreign Direct Investment in Africa," USDA Miscellaneous 329078, United States Department of Agriculture.

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    More about this item

    Keywords

    Greenfield foreign direct investment (GFDI); foreign direct investment (FDI); COVID-19 crisis; global financial crisis; GFDI industries; GFDI countries;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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