Greenfield FDI is expected to decline by up to 15% in 2015 from 2014 levels, experts reported at the second annual fDi Forum in London on September 24. Global mergers and acquisitions (M&A), however, are on the rise, particularly in North America and the Asia-Pacific region. International business leaders and legal experts emphasised the importance of FDI to economic growth, highlighting its role in global trade, employment, and research and development (R&D).

Greenfield FDI is down in every region of the world, according to Dr Henry Loewendahl, chief executive of Hong Kong-based FDI consultancy Wavteq. “FDI is expected to be lower than in 2014 and most industries are down. These are very challenging times to attract greenfield investment from multinational enterprises.”

FDI’s role in global growth is undeniably significant – in 2015, the world’s top 200 multinational companies comprised 20% of global GDP, and the top 700 companies comprised between 50% and 67% of global R&D spending, according to greenfield investment monitor fDi Markets. The top 500 companies made up 70% of world trade. 

Global M&A is growing, meanwhile, totalling more than $3000bn at the end of August. Crossborder M&A is at its second highest point since 2007. Record M&A levels were reached in North America and Asia-Pacific in sectors such as healthcare, technology and telecommunications. This has been driven by consolidation, tech disruption in media and entertainment, volatility in oil and gas, and enabled by cash balances and low interest rates.

The UN Conference on Trade and Development estimates that overall FDI flows (not merely greenfield projects) have increased 11% in 2015 to $1400bn. India was named the best performing country for FDI this year – its greenfield FDI is already up 40% and it is seeing major manufacturing projects underway from multinationals such as steelmaker Posco, renewable energy company Sun Edison, carmaker Toyota, solar panel producer Trina Solar and miner Vedanta.

Other countries performing well include the US, Indonesia, Australia and Canada. Despite a global slowdown in commodities, they are seeing FDI pickup and are among the top 10 countries for FDI globally, according to fDi Markets.