CHAPTER I Global Investment Trends

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World Investment Report 2011: Non-Equity Modes of International Production and Development
Russian Federation, India and China – have gained
ground as important investors in recent years as
the result of rapid economic growth in their home
countries, abundant financial resources and strong
motivations to acquire resources and strategic
assets abroad (section C).
In 2010 there were seven mega-deals (over
$3 billion) involving developing and transition
economies (or 12 per cent of the total) (annex table
I.7), compared to only two (or 3 per cent of the total)
in 2009. Firms from developing Asia expanded their
acquisitions in 2010 beyond their own regions. For
example China’s outward FDI showed substantial
increases in Latin America (chapter II; ECLAC,
2011). Transition-economy firms also increased
their purchases in other transition economies in
2010.
b. FDI by sector and industry
In the aftermath of the
crisis, FDI in manufacturing
bounced back while
services sector FDI is still
in decline.
Figure I.8. Distribution of FDI projects, a by host region, 2007 and 2010
(Per cent)
(a) by developed country TNCs
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6 4 To transition economies 5 7
2007 2010 2007 2010
Source: UNCTAD, based on UNCTAD cross-border M&A database and information from
the Financial Times Ltd, fDi Markets (www.fDimarkets.com).
a Including both cross-border M&As and greenfield FDI projects.
The unchanged level of
overall FDI in 2010 also
obscures some major
sectoral differences. Data
on FDI projects (both crossborder
M&As and greenfield
investment) indicate that the value and share of
manufacturing rose, accounting for almost half of
the total. The value and share of the primary and
services sector declined (figure I.10). Compared
with the pre-crisis level (2005–2007), the picture
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To developed economies
To developing economies
(b) by developing and transition country TNCs
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is quite different. While the primary sector has
recovered, services are still less than half, and
manufacturing is 10 per cent below their pre-crisis
levels (annex table I.5).
The value of FDI projects in manufacturing rose by
23 per cent in 2010 compared to 2009, reaching
$554 billion. The financial crisis hit a range of
manufacturing industries hard, but the shock could
eventually prove to be a boon to the sector, as many
companies were forced to restructure into more
productive and profitable activities – with attendant
effects on FDI. In the United States, for example,
FDI in manufacturing rose by 62 per cent in 2010,
accompanied by a substantial rise in productivity
(Bureau of Labor Statistics, 2011).
Within manufacturing, business-cycle sensitive
industries such as metal and metal products,
electrical and electronics equipment and wood
and wood products were hit by the crisis, in terms
of sales and profits (annex table I.5). As a result,
investment fell in these industries, which suffered
from serious overcapacity and wished to use cash
to restore their balance sheet. In addition, their
prospects for higher demand and market growth
remained gloomy, especially in developed countries.
Some manufacturing industries such as chemicals
(including pharmaceuticals) remained more resilient
to the crisis; while other industries, such as food,
beverages and tobacco, textile and garments, and
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