Introduction
I) Importance of Foreign direct investment
Advantages and Disadvantages of FDI
II) European Union, an attractive investment destination?
Countries attracting foreign investors
Who is investing in Europe?
European Union’s strategy to attract foreign investors.
What are the most important factors to be attractive?
How European Union promote FDI?
Conclusion
European Union
“European Union’s Foreign Direct Investment”
Introduction
Foreign direct investment has always been an extremely important factor concerning the
development of the world’s economy. Many countries, specially emerging economies have
become highly dependent on foreign investment. Not only emerging economies are
concerned, also developed countries are trying to be attractive for potential foreign
investors. But why is FDI so important? Actually, when we refer to foreign direct
investment it refers to a potential economic growth for any country.
According to the OECD estimates, global Foreign Direct Investment flows have suffered
in 2012 an important decline of 14% compared to 2011. Talking more specifically about
the European Union, their given and received investment also faced a decline nearly by
25%. This important decline can be explained by the crisis that Europe is facing since the
past few years, where economy hasn’t go as well as expected.
In 2012, China took the lead as the most attractive Foreign Direct Investment destination,
followed by United States, Brazil, United Kingdom and France. But still United States
remains as the leading investment economy.
In this report we will concentrate mainly in the Foreign Direct Investment concerning the
European Union. First of all, we will explain the importance of foreign investment for
countries development and economy, as well as the advantages and disadvantages of FDI.
In second place we will try to define whether or not the European Union is an attractive
investment destination and which countries and sectors are concerned. Finally, we will
study the European Union’s future strategy to attract potential investors.
I) Importance of Foreign direct investment
First of all, to make it clear it is important to give a concrete definition of Foreign Direct
Investment. According to the Organization for Economic Co-operation and Development,
“FDI is defined as a cross-border investment by a resident entity in one economy with the
objective of obtaining a lasting interest in an enterprise resident in another economy.” In
simple words it refers to the action of investing in a foreign company, which permits
certain influence from the investor in the company that they invested.
Since the early 1980s, Foreign Direct Investments have exploded around the world,
