Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/227866
Authors: 
Damgaard, Jannick
Elkjaer, Thomas
Johannesen, Niels
Year of Publication: 
2019
Series/Report no.: 
Danmarks Nationalbank Working Papers No. 148
Abstract: 
Macro statistics on foreign direct investment (FDI) are blurred by offshore centers with enormous inward and outward investment positions. This paper uses several new data sources, both macro and micro, to estimate the global FDI network while disentangling real investment and phantom investment and allocating real investment to ultimate investor economies. We find that phantom investment into corporate shells with no substance and no real links to the local economy may account for almost 40 percent of global FDI. Ignoring phantom investment and allocating real investment to ultimate investors increases the explanatory power of standard gravity variables by around 25 percent.
Subjects: 
Global FDI Network
Special Purpose Entities
Phantom FDI
Real FDI
JEL: 
F21
F23
F30
Document Type: 
Working Paper

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