FDI Trends
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FDI Trends In the 1970s, there existed large constraints on the movement of capital across countries. Despite savings falling short of investment demand in most countries, policy makers had their reservations against FDI. In the current era of deregulated capital markets, countries perceive FDI as engines of growth and actively solicit FDI flows. There has been a qualitative shift in the pattern of FDI flows. It is no more common for FDI to occur through Greenfield investments1. Now, almost all of the world's FDI is done in the form of cross-border Mergers and Acquisitions (M&A). In 2000, 100 per cent of inward FDI for developed countries was a result of M&A activity, up from 80 per cent in the mid 1990s. In developing countries this figure was closer to 40 per cent. The exponential growth in the magnitude of cross border M&A is shown in Appendix 2. In this connection, analysts...

