Analysis of developments in the fields of direct investment and M&A – 2012 Report Part II: The EU, the BRICs and other emerging economies

Sector: Finance | Financial markets and Institutions
Client: EC DG Internal Market and Services
Published: November, 2012
Document type: Report 
Tagged: analysis of economic developments EC/EEA other international

The study looks more closely into the evolution of FDI between the EU and the BRICs, considering where the EU’s position and prospects are, both as origin and as destination for BRIC FDI. Global investment trends show that over the past 15 years the BRICs, as well as other emerging economies, have become increasingly important as destinations for foreign direct investment (FDI). The BRICs share as source countries in worldwide FDI inflows has almost doubled over the past 5 years (rising from 12.8% to 23.5%).  The BRICs combined account for 85% of all emerging economy in EU inward FDI (in stock terms), and are hosts to nearly 70% of EU outward investments in emerging economies. Relative to the rest of the world, though, the BRICs share in the EU’s inward FDI is still modest (5% of extra-EU inward FDI and 1.9% of total inward FDI). Moreover, while the BRICs are responsible for about 15% of global FDI outflows, the EU is not a particularly favoured destination of these flows: only 5-10% of FDI received in the EU originates in the BRIC countries.