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Supply-chain disruptions and new investment policies in the post-COVID-19 world: Initial insights from project-level data

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  • Monika Sztajerowska

Abstract

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.

Suggested Citation

  • Monika Sztajerowska, 2023. "Supply-chain disruptions and new investment policies in the post-COVID-19 world: Initial insights from project-level data," OECD Working Papers on International Investment 2023/01, OECD Publishing.
    • Handle: RePEc:oec:dafaaa:2023/01-en
    DOI: 10.1787/5fcc2892-en
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    More about this item

    Keywords

    COVID-19; de-globalisation; FDI; Foreign direct investment; greenfield; supply chains;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism

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