Global Trends in Foreign Direct Investment: Findings from Bibliometric Analysis for Policy Recommendations

Abstract

Introduction: Foreign direct investment (FDI) is a crucial aspect of Global Value Chains (GVCs) and is recognized as a key driver of global economic growth. However, there has been a notable decline in investment activity, with a 10% drop in FDI compared to 2022. Current geopolitical tensions may contribute to the decline in FDI, but a closer examination reveals that the reduction is widespread across all sectors and countries.

Objectives: This study delves into the current trends surrounding FDI and identifies the key factors that countries prioritize in their efforts to attract such investments. It aims to investigate which nations and institutions are directing more attention to FDI, as well as the sectors that organizations should focus on to enhance their capacity to secure additional investment.

Methods: The bibliometric analysis data was sourced from the Scopus database. A comprehensive review of 241 papers was conducted for this study through PRISMA method.

Results: The findings reveal that North America, China, Canada, and India emerged as the most interconnected hubs, establishing a significant research center for foreign investment. The United States and Canada were noted as the most productive countries, underscoring their global prominence in this field. The theme of globalization is gaining traction, emphasizing the necessity for sustainability in investment practices. However, geopolitical tensions have been identified as a major factor contributing to the decline in FDI.

Conclusions: Policymakers are encouraged to adopt strategies to incorporate emerging themes such as sustainability and technological advancement to regain lost market share. Collaborating with leading researchers from countries like Canada and Australia can aid in identifying and implementing best practices to foster a more conducive investment environment. Focus on manufacturing sectors and trade liberalization policies can consistently attract more FDI. Thus ensuring the economic stability of the country..