Taxation and FDI In Developed and Developing Countries

1 Taxation and FDI In Developed and Developing Countries Timothy J. Goodspeed ∗ Introduction From 1980 to 2000, foreign direct investment (FDI) increased substantially in the world. According to statistics from UNCTAD, the world inward stock of FDI was $0.7 trillion in 1980, $1.95 trillion in 1990, and $6.15 trillion in 2000. Corresponding figures for the world outward stock of FDI are $0.56, $1.76, and $5.99 trillion, respectively. Developed countries are the generators of the vast majority of FDI outflows (86% of the world stock in 2000), and the receivers of the vast majority of inflows (65% of the world stock in 2000). However, the shares of developing countries, whose FDI inflows come mainly from developed countries, are increasing. The inward FDI stock of developing countries has risen from 28% of the world stock in 1990 to 33% in 2000, while their share of the world outward stock has risen from 7% to 13% during this period. ∗ Department of Economics, Hunter College and CUNY Graduate Center

Taxation and FDI In Developed and Developing Countries

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