Long abstract

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The global environment for foreign direct investment (FDI) improved in 2005. Macroeconomic growth, traditionally one of the main drivers of direct investment, held up in North America and gained momentum in several other OECD countries. At the same time corporate profitability was generally strong, interest rates were low and equity valuation in most countries firm, all of which imply that ample liquidity was available to those companies wanting to invest abroad. In a separate development, real estate prices also reached peak levels in many countries, which seems to have spurred a wave of cross-border investment in property and in businesses involved in property administration.