Recent trends indicate that the
vast majority of new foreign direct investment (FDI) is beginning to flow into
emerging markets rather than traditional markets such as the US.
Highlighting a shift in the competitive landscape, the US is starting to lose out
to emerging markets in relation to FDI, much of which travels across borders in
the form of mergers and acquisitions.
Of all new FDI travelling around the globe in 2012, 12 per cent flowed into the
US, making it the largest single recipient of FDI but at a dramatically reduced
rate. In 2000, 22 per cent of new FDI travelled into the US, highlighting a
marked drop in last year’s tally.
Despite the fact that factors
such as political instability surround emerging economies – they are seen as
far better for quick economic growth, offering investors the opportunity to get
more bang for their buck.
In 2012, developing economies attracted more than half – 52 per cent – of
global foreign direct investment, taking over from developing countries for the
first time.
Overall global FDI fell in 2012
following years of increases after the last recession. However, for the first
half of 2013, new FDI into the US dropped by 22 per cent from the first six
months of 2012. The United Nations has predicted that FDI will not improve
until after this year, due in part to “macroeconomic weakness” across the
globe, the WSJ reported.
Companies now have so many options in terms of countries to invest in,
confirmed Matthew Slaughter, professor at Dartmouth's Tuck School of Business.
While the US still has so many positives, including a business-friendly
environment linked to global integration and relatively low tariff barriers,
its smaller piece of global FDI is concerning. It needs to begin to focus on
what international investors are looking for.
Chief financial officers of U.S. subsidiaries of foreign companies were polled
by PricewaterhouseCoopers LLC in a 2011 survey for the Organization for
International Investment. They were asked what they were looking for when they chose
where to invest, and listed the country’s the corporate tax system, workforce
skills and trade policy. To many, the US has not been making much progress on
those three points, while in contrast, other countries are progressing well.
The EU and Canada are currently ironing out the final details of a trade pact,
hot on the heels of the one signed by Taiwan and Singapore last month. The US’
trade pacts that are currently in the pipeline – the Transatlantic Trade and
Investment Partnership and the Trans-Pacific Partnership – were affected and
slowed by the 16-day federal government shutdown in October.
About Merrill DataSite
Merrill DataSite is a secure
virtual data room (VDR) solution that optimises the due diligence process by
providing a highly efficient and secure method for sharing key business
information between multiple parties. Merrill DataSite provides unlimited
access for users worldwide, as well as real-time activity reports, site-wide
search at the document level, enhanced communications through the Q&A
feature and superior project management service - all of which help reduce
transaction time and expense. Merrill DataSite’s multilingual support staff is
available from anywhere in the world, 24/7, and can have your VDR up and
running with thousands of pages loaded within 24 hours or less.
With its deep roots in
transaction and compliance services, Merrill Corporation has a cultural,
organisation-wide discipline in the management and processing of confidential
content. Merrill DataSite is the first VDR provider to understand customer and
industry needs by earning an ISO/IEC 27001:2005 certificate of registration –
the highest standard for information security – and is currently the world’s
only VDR certified for operations in the Europe, United States and Asia.
As the leading provider of VDR
solutions, Merrill DataSite has empowered more than two million unique visitors
to perform electronic due diligence on thousands of transactions totalling
trillions of dollars in asset value. Merrill DataSite VDR solution has become
an essential tool in an efficient and legally defensible process for completing
multiple types of financial transactions.
For more information, please
contact Merrill DataSite: Tel: 1-866-867-0309
Read
the full article here:
Follow
us on Twitter: @merrilldatasite
