Western European companies established 5302 FDI projects overseas in 2010, investing an estimated $298bn and creating an estimated 735,798 jobs. The region accounted for 44% of FDI projects overseas, despite a 4% year-on-year decline.
FDI from Middle East companies continued its sharp decline in 2010, with companies setting up 15% fewer FDI projects in 2010, following a 32% decline in 2009. Capital investment by companies headquartered in the region declined by more than 50% in 2010, following a 59% decline in 2009. Most notably Bahrain (-63%), Saudi Arabia (-45%) and Kuwait (-26%) witnessed large negative growth in FDI projects established overseas. The current political crisis in the Middle East and north Africa means that the region's prospects for 2011 are uncertain.
Rest of Europe rise
The 'Rest of Europe' region, comprising eastern Europe, south-east Europe and Russia, replaced the Middle East as the fourth largest source market for FDI projects following a 20% increase in projects overseas in 2010. The Rest of Europe was the only region to see an increase in capital investment overseas, which was up 17%.
North America, Asia-Pacific and Latin America and the Caribbean all had small year-on-year increases of outward FDI projects of 3%, 4% and 6%, respectively. Latin America and the Caribbean is the only region to have a year-on-year increase in the number of outward FDI projects over the past seven years, indicating the economic growth and dynamism of the region. However, with only 2% of global FDI projects, the region still has a long way to go before becoming a global player in outward FDI.
Only 1.19% of global FDI projects were from African companies in 2010, following another 12% year-on-year decline in the number of overseas FDI projects. Investment and jobs created by African companies overseas declined by 1% and 3%, respectively, in 2010.
US leads greenfield FDI
The US was again the leading source country for greenfield FDI, with US companies announcing 2800 FDI projects overseas, more than double the number of the second leading source country, the UK. The US accounted for 25% of global FDI projects, 16% of global capital investment and 20% of estimated jobs created. US companies announced 113 more FDI projects overseas in 2010 than in 2009, the highest increase in overseas FDI of any source country.
After the US, the UK, Germany, Japan and France were the top source countries for FDI in 2010. Of these countries, Japan experienced the biggest year-on-year increase in overseas FDI with a 14% increase in the number of projects, while France had the biggest decline of 16%, with a 29% decline in capital investment overseas.
South Korean companies recorded a 12.5% growth in FDI projects overseas in 2010. Associated capital investment increased by 36%, making the country the sixth largest investor overseas in 2010, up from 11th place in 2009. An estimated 106,443 jobs were created overseas by South Korean companies in 2010, 50% higher than in 2009, making the country the fifth biggest creator of jobs overseas in the world.
London top source city
London remained the top source city for FDI projects for the sixth year running in 2010, with companies headquartered there announcing 616 FDI projects (5% of the global total), with estimated capital investment of $41bn and creating more than 70,000 jobs.
Paris ranked second to London in terms of outward FDI projects in 2010, although with a decline in overseas projects of 19%, it led New York by only three projects. Tokyo was in fourth position with Seoul in fifth.
Seoul-based companies created more than 95,000 estimated jobs overseas in 2010, 59% higher than 2009, ranking Seoul as the top source city in the world in terms of job creation overseas. These jobs were created as a result of 171 projects and almost $32bn in estimated capital investment – an increase of 38% compared with 2009.
Each of the 11 Japanese cities that featured in the top 150 cities for FDI projects overseas in 2010 witnessed an increase in FDI projects in comparison with 2009. These cities accounted for 6% of global FDI projects in 2010.
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