Source: UNCTAD. http://www.unctad.org/statistics/handbook

Global Inflows of Foreign Direct Investments, 1990-2005 (in million $US)

A Foreign Direct Investment (FDI) involves direct investments in productive assets by a company incorporated in a foreign country. It goes on par with international trade since the additional production capacity brought to bear is often used to increase exports. After 1995, the process accelerated, both for FDIs bound for developing and developed countries. FDIs are however closely linked with cycles of growth and recession. When the economy is slowing down, often after a phase of over accumulation of investments (and the resulting overcapacity), FDIs are substantially cut back.

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