Emerging markets are becoming important sources of foreign direct investment (FDI), with south-south – investments flowing among emerging markets – playing a bigger role.
According to recent MIGA report, the reasons for the increase in south-south FDI include, rising demand for energy in emerging markets, increase in south-south trade, proximity and cultural affinity, cost competitiveness, and outward FDI support.
The graph below shows global FDI outflows for developed and emerging markets, with a steady growth of both types of FDI since 2003.
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