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The global foreign direct investment network: evolution and influencing factors

Bing Li (Business School, University of Shanghai for Science and Technology, Shanghai, China) (Financial Research Center, Fudan University, Shanghai, China)
Zhihui Shi (Business School, University of Shanghai for Science and Technology, Shanghai, China)
Wei Guo (Business School, University of Shanghai for Science and Technology, Shanghai, China)


ISSN: 0368-492X

Article publication date: 2 December 2022




As foreign direct investment (FDI) plays an important role in economic globalization. This paper examines the structural features of the global FDI network based on FDI flows data and changes in the position of countries within the network.


In order to study the structural characteristics of the global FDI network and the status and changes of countries in the global FDI network, the authors build the investment network and apply the QAP (Quadratic Assignment Procedure) analysis to examine the evolutionary characteristics of the network and its influencing factors.


The global FDI network becomes more interconnected and has a clear “core-periphery” structure. The network connections and volumes have increased dramatically and most countries spread their assets across multiple countries, while only a handful of countries have concentrated investments. The topological structure of the global FDI network has changed noticeably, although this process has been slow and stable and countries in the core position have remained largely intact. The authors find that trade relations between countries, geographic distance and differences in economic size, income levels and institutional environments all have a significant impact on the global FDI network.

Research limitations/implications

Although we find some valuable results, some aspects need further investigation. For example, how a country uses the investment network to boost its economy and how the different industries in the investment network change over time. It is important to get the industry-level details to understand the impact of the global investment network from a government's perspective.

Practical implications

FDI affects the distribution of international capital and contributes to the development of the global economy. Therefore, it is important to study the characteristics of the global FDI network and its development patterns. With more understanding about the network as well as its evolutionary pattern, the government can possibly carry out some policies to promote direct investments as well as economic development.

Social implications

All countries should actively engage in international direct investments and strengthen their economic ties. At the same time, they can put more emphasis on inward or outward FDI based on their own level of economic development to better establish the circulation channel for domestic and international capital.


This paper examines foreign direct investments through the lens of a global network. In contrast to traditional bilateral studies, this paper focuses on the network structure and evolution, reflecting the dynamics of the entire direct investment system as well as the changing positions of participating countries.



The authors are grateful to Gandolfo Dominici (the editor) and two anonymous referees. Bing Li acknowledges the financial support from Shanghai Philosophy and Social Science Foundation (Grant No. 2019BJB009). All errors are the authors'.


Li, B., Shi, Z. and Guo, W. (2022), "The global foreign direct investment network: evolution and influencing factors", Kybernetes, Vol. ahead-of-print No. ahead-of-print.



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