To which places does Foreign Direct Investment (FDI) flow? How much FDI received a region in a given year? Answers to such questions are crucial to understand how regions can benefit from FDI, but data to answer them is often missing. In a project co-funded by the European Commission, the OECD works with experts from National Statistical Institutes and Central Banks to fill this knowledge gap by leveraging existing datasets and creating new ones.
Measuring Foreign Direct Investment in Regions
How can Foreign Direct Investment in regions be measured? What are the economic opportunities and potential risks associated with it and how are they distributed?
About
Context
FDI flows measure the value of direct investment during a given period. FDI stocks capture the accumulated level of direct investment at a given point in time. An important part of FDI are equity-based investments that can come as greenfield FDI or brownfield FDI. Greenfield investments are those where a firm sets up or expands their business operations abroad, whereas brownfield investments are those where a firm acquires a significant ownership share of an existing firm abroad. This project uses both official data on FDI flows and stocks as well as commercial data capturing greenfield and brownfield investment to understand how FDI and the related economic opportunities are spatially distributed.
Subnational FDI statistics in large (TL2) regions (2012-latest available year)
16 OECD countries collect subnational FDI flows or FDI stocks data as of 2023. The distribution of FDI in these countries is very concentrated. Across countries with available data, large (TL2) OECD regions where the capital city is located account on average for 45% of total FDI inflows, and 49% of FDI inward stocks. The percentage is higher for brownfield investments (56%) than for greenfield (29%). A better understanding of what type of investment flows in which region can help national and local policy makers leverage more effectively specific types of FDI for regional development.
How it works
Develop a cross-country harmonised set of indicators on FDI at the subnational level
Provide policymakers with guidance on how to best leverage FDI for regional development based on the insights coming out from the analysis of the newly-developed indicators
A database comprising different proxies of FDI at the subnational level (TL2/TL3)
A technical document containing the proposed methodology on distinguishing between foreign- and domestic-controlled firms by region in their country
An OECD report summarising the conclusions of the project
Timeline
65%
65% of FDI
went to the 10% largest OECD TL2 regions during 2012-22
16
16 OECD countries
collect subnational FDI flows or FDI stocks data as of 2023.
75%
75% of investments
by the largest 500 multinationals in terms of turnover target regions with a metropolitan area of at least 1.5 million inhabitants.
Get in touch
Alexander Lembcke
mailto: Alexander.LEMBCKE@oecd.org