FDI Patterns and Global Value Chains in the Digital Economy

The modern process of digitalization of the world economy entails global flows of investment in technology-based industries and knowledge activities located upstream of value chains. This work exploits the wealth of information offered by the fDi Markets database to provide an overview about the geographical patterns of FDIs and of specialization in digital industries and in technological activities.We showremarkable differences across both advanced and emerging economies in this respect. Europe is both a big attractor and a big investor in digital related business, but relies on emerging economies more to offshore production than to set up R&D labs in these countries. By contrast, North American economies are more prone to engage in knowledge intensive FDIs towards the most dynamic emerging countries than is the case of Europe.Emerging economies also play a large variety of rolesinglobal flows of investment in digital industries.However, with the relevant exceptions of China, India and the Four Asian Tigers, inward and outward FDIsof Emerging economies are predominantlyproduction-oriented, with a lower involvement in R&D, Design and ICT activities. Hence, the observed patterns of FDIs appear to consolidate existing hierarchies in digital related global production networks, creating limited upgrading opportunities in the case of most emerging economies.