TABLE OF CONTENTS XI Page easing of restrictions on outward FDI 201 Figures Total net resou M&As b 0 by nur and region y instituted cases,1987-00 话8990445 outh 004-20 1995-2005 0420 on South East and Souh-EastAs 42002-2004 A Icapital formation. 01446066 115 selected countries in 68 ton 10 e nomies,.2004-200 89 042005 200 cres and品anecto tal form heir share in gross fixed ,2004-200 East m5-005 08 d co and tran 190-200 TNCs fro sby developi and by destination. 7 M&Ap叫 116 banies hased in develoning and transition m.8 al and ints 116 119 l.9 Relationship be ransition eco nomies in total D 120
TABLE OF CONTENTS xi V.3.1. Financial results of CSCEC, 2000 and 2005 ............................................................................................... 174 VI.2.1. South Africa’s gradual easing of restrictions on outward FDI................................................................... 207 I.1. FDI inflows, global and by group of economies, 1980–2005 ........................................................................ 4 I.2. Concentration of FDI inflows: the share of the top 5 FDI recipients in the world total, 1980-2005 ......... 4 I.3. Total net resource flows to developing countries, by type of flow, 1990-2005 ........................................... 5 I.4. Cross-border M&As by sector, 2004-2005 ...................................................................................................... 8 I.5. Sectoral breakdown of cross-border M&A sales, 1987-2005 ........................................................................ 8 1.6. Transnationality index of host economies, 2003 ........................................................................................... 11 I.7. Number of cross-border M&As by collective investment funds, by target region, 1987-2005 ................ 20 I.8. Cross-border M&As by private equity funds and hedge funds, by sector and main industry, 2005 ........ 22 I.9. Regulatory changes in 2005, by nature and region ....................................................................................... 25 I.10. Number of BITs and DTTs concluded, cumulative and annual, 1995-2005 ............................................... 26 I.11. Total BITs concluded, by country group, as of end 2005 ............................................................................. 27 I.12. Total DTTs concluded, by country group, as of end 2005 ........................................................................... 27 I.13. Top 10 signatories of BITs, as of end 2005 ................................................................................................... 28 I.14. The growth of IIAs other than BITs and DTTs, 1957 to 2005 ..................................................................... 28 I.15. Known investment treaty arbitrations, cumulative and newly instituted cases, 1987-2005 .................... 29 II.1. FDI flows by region, 2004-2005 .................................................................................................................... 39 II.2. Africa: FDI inflows and their share in gross fixed capital formation, 1995-2005 ..................................... 40 II.3. Shares of Africa in world FDI inflows, world GDP and world exports, 1970-2005 ................................. 41 II.4. Africa: FDI inflows, top 10 economies, 2004-2005 ..................................................................................... 41 II.5. Africa: FDI outflows, by subregion, 1995-2005 ........................................................................................... 45 II.6. South, East and South-East Asia, and Oceania: FDI inflows and their share in gross fixed capital formation, 1995-2005.................................................................................................. 50 II.7. South, East and South-East Asia: top 10 recipients of FDI inflows, 2004-2005 ....................................... 51 II.8. South, East and South-East Asia, and Oceania, FDI outflows, by subregion, 1995-2005 ........................ 54 II.9. South, East and South-East Asia: top 10 sources of FDI outflows, 2004-2005 ......................................... 54 II.10. Pattern of intraregional FDI flows in South, East and South-East Asia, 2002-2004 ................................. 56 II.11. West Asia: FDI inflows and their share in gross fixed capital formation, 1995-2005 ............................... 60 II.12. West Asia: FDI flows, top five economies, 2004-2005 ................................................................................ 62 II.13. West Asia: FDI outflows, by subregion, 1995-2005 ..................................................................................... 63 II.14. Latin America and the Caribbean: FDI inflows and their share in gross fixed capital formation, 1995-2005 ...................................................................................................... 68 II.15. FDI inflows and income on FDI inflows in selected countries in Latin America and the Caribbeana, 2000-2005 ............................................................................................. 69 II.16. Latin America and the Caribbean: FDI flows, top 10 economies, 2004-2005 ........................................... 69 II.17. Latin America and the Caribbean: FDI outflows, by subregion, 1995-2005 .............................................. 71 II.18. Latin America and the Caribbean: FDI inflows by sector, 2004-2005 ........................................................ 71 II.19. South-East Europe and the CIS: FDI inflows and their share in gross fixed capital formation, 1995-2005 .......................................................................................................................... 78 II.20. South-East Europe and the CIS: top 10 economies for FDI inflows, 2004-2005 ...................................... 79 II.21. South-East Europe and the CIS: FDI outflows, by subregion, 1995-2005 ................................................. 80 II.22. Developed countries: FDI inflows and their share in gross fixed capital formation, 1995-2005 ............. 84 II.23. Developed countries: FDI flows, top 10 economies, 2004-2005 ................................................................. 84 II.24. Developed countries: FDI outflows, by subregion, 1995-2005 ................................................................... 88 III.1. FDI outflows from developing and transition economies, 1980-2005 ...................................................... 107 III.2. Outward FDI flows from developing and transition economies, 1980-2005 ........................................... 108 III.3. Cross-border M&As by TNCs from developing and transition economies, by origin of purchaser, 1987-2005 ............................................................................................................... 109 III.4. Cross-border M&As by developing and transition economies, by destination, 1987-2005 .................... 109 III.5. Outward FDI stock, by source region, 1980-2005 ...................................................................................... 113 III.6. Shares of the main offshore financial centres in FDI flows from developing and transition economies, 1980-2005........................................................................................................... 116 III.7. Cross-border M&A purchases by companies based in developing and transition economies, by sector, 1987-2005.................................................................................................................. 116 III.8. Intraregional and interregional flows in developing countries excluding offshore financial centres, average for 2002-2004 ...................................................................................... 119 III.9. Relationship between real GDP per capita and the share of developing and transition economies in total FDI inflows, 2002-2004 ............................................................................... 120 Page
World Investment Report 2006.FDI from Developing and Transition Economies:implic cations for Development Page .10 Dis of fo TNC from developin o an ition 81989md280 nd GDP P .selected 20m. ave age grov UNC AD 2002 sting abroad ard FDI flows 1000.200 erre leveloping-country 2006 ng-cou eloped-and developing-county TNC 189 fexn by host cgio Tables 1234567 1087.200 M&As by collecti det M&A un1987-200 41569 202223 2004 r the top 100 TNCs from both lists,by industry,2004 om Me mics.2004-2003 200 24 ,2004-2005 FDI of S uth. East and South-East Asia rom 1990200nge,200 ast and S uth- 005- 53 .8 2004,2005 2004-200 A sia distribution of cross-border M&As,by 2005 63 ms.2004-2003 distribution of cre M&A East Euro by range.2005 the CIS distribution of
xii World Investment Report 2006. FDI from Developing and Transition Economies: Implications for Development III.10. Distribution of foreign affiliates by TNCs from developing and transition economies, 1989 and 2005 ........................................................................................................... 124 IV.1. Relationship between net outward investment and GDP per capita, selected countries, 2004 ............... 144 IV.2. Annual average growth rates of outward FDI flows................................................................................... 146 V.1. Main benefits gained by developing-country TNCs from investing abroad: results of the UNCTAD global survey, 2006 ............................................................................................... 172 V.2. Share of repatriated profits in total income on outward FDI flows, 1990-2004 ...................................... 186 V.3. Preferred mode of establishment of overseas affiliates by developing-country TNCs, 2006 ................. 186 V.4. Sales of foreign affiliates established by developed- and developing-country TNCs, various years .... 187 V.5. Share of R&D expenditures of foreign affiliates of developed- and developing-country TNCs in total gross domestic R&D expenditure, selected host countries, various years........................ 189 V.6. Share of exports of foreign affiliates of developed- and developing-country TNCs in total exports, selected countries, various years....................................................................................... 192 V.7. Employment in foreign affiliates of TNCs from developing and developed countries, various years... 193 VI.1. Share of countries with controls on outward FDI or notification requirements, by region, 1996-2005 206 VI.2. Percentage of IPAs that target FDI from developing or transition economies, by region of IPAs ......... 221 VI.3. Developing and transition economies targeted by IPAs as potential sources of FDI .............................. 221 VI.4. Regional distribution of targeted developing and transition economies by host region ......................... 222 VI.5. Target industries for IPAs promoting FDI from developing and transition economies ........................... 224 I.1. Distribution of FDI by region and selected countries, 1980-2005 ................................................................ 7 I.2. Selected indicators of FDI and international production, 1982-2005 ........................................................... 9 I.3. Cross-border M&As valued at over $1 billion, 1987-2005.......................................................................... 14 I.4. Cross-border M&As through exchange of shares, 1987-2005 ..................................................................... 15 I.5. Main characteristics of cross-border M&As: then and now......................................................................... 16 I.6. Cross-border M&As by collective investment funds, 1987-2005 ............................................................... 19 I.7. Selected 20 large cross-border M&As using collective investment funds, announced or completed during 2004-March 2006 ...................................................................................... 20 I.8. Top 20 rankings by Inward FDI Performance Index, 1995, 2004 and 2005 ............................................... 22 I.9. Inward FDI Performance Index, by region, 1990, 2004 and 2005 .............................................................. 23 I.10. Matrix of inward FDI performance and potential, 2004............................................................................... 24 I.11. National regulatory changes, 1992-2005 ....................................................................................................... 24 I.12. IIAs concluded, by region, cumulative and 2005.......................................................................................... 28 I.13. Snapshot of the world’s 100 largest TNCs, 2003, 2004 ............................................................................... 31 I.14. Snapshot of the world’s 50 largest TNCs from developing economies, 2003, 2004 ................................. 32 I.15. Performance measures of the largest TNCs from developing economies, 2004 ........................................ 32 I.16. Comparison of TNI values, by region, 2003, 2004 ....................................................................................... 33 I.17. Comparison of II and TNI values for the top 100 TNCs from both lists, by industry, 2004 .................... 34 I.18. Most-favoured locations of top 100 TNCs from both lists........................................................................... 35 I.19. Preferred locations of TNCs from Mexico and Malaysia, 2005 .................................................................. 35 II.1. Sectoral distribution of cross-border M&As, by group of economies, 2004-2005 .................................... 40 II.2. Africa: country distribution of FDI flows, by range, 2005 .......................................................................... 42 II.3. Africa: distribution of cross-border M&As, by home/host region, 2004-2005 ......................................... 44 II.4. Africa: distribution of cross-border M&As of African countries, by sector/industry, 2004-2005 ........... 46 II.5. South, East and South-East Asia, and Oceania: country distribution of FDI flows, by range, 2005 ....... 51 II.6. Inward FDI of South, East and South-East Asia from major country groups, 1990-2004 ........................ 53 II.7. Selected large M&A deals undertaken by United States private equity investors in South, East and South-East Asia, 2005-early 2006 ....................................................................................... 53 II.8. South, East and South-East Asia: distribution of cross-border M&A sales, by sector/industry, 2004, 2005 ........................................................................................................................ 58 II.9. West Asia: distribution of cross-border M&As, by home/host region, 2004-2005 .................................... 63 II.10. West Asia: distribution of cross-border M&As, by sector, 2004-2005 ....................................................... 63 II.11. Latin America and the Caribbean: distribution of cross-border M&As, by sector/industry, 2004-2005......................................................................................................................... 70 II.12. Latin America and the Caribbean: country distribution of FDI flows, by range, 2005 ............................. 70 II.13. South-East Europe and the CIS: distribution of cross-border M&As, by home/host country, 2004-2005 .................................................................................................................. 79 II.14. South-East Europe and the CIS: distribution of cross-border M&As, by sector/industry, 2004-2005 .... 81 II.15. Inward FDI of developed countries from major country groups, 1990-2004 ............................................. 87 Page
TABLE OF CONTENTS XIl Page ,2004-200 200 ,2004-2005 cr-boreMA els by TN Cs from ng and nsition economies 1987-2005 00 112 4 ward FDI..98,190.2008a ies in terms o 13 r developing and 115 200 selected industries 2004 major countr gr0ups.1990-200 ition economies m.12 121 ec 345678 200 ales 2004 1235 Largest Asia by 934 by sources of advantage y com alue no-payment 1987200 t of FDI in the United States. 173 selected developins V.3. 179 Exports per unit 192 V.5. 194 nin ub-Sahran fco rd FDL surve oping or transition ec Annex A 198 1991a0 002-2004 s and foreign affil hy region and 20 M&A latest available year 1987-2 colectempleteg ent fund 最 and Potential In ankings.1990-200 ranked by foreign foreign assets,2004 217720 an 286
TABLE OF CONTENTS xiii II.16. Developed countries: distribution of cross-border M&As, by home/host region, 2004-2005 ................. 87 II.17. Developed countries: country distribution of FDI flows, by range, 2005 .................................................. 88 II.18. Outward FDI from developed countries to major country groups, 1990-2004 .......................................... 90 II.19. Developed countries: distribution of cross-border M&As, by sector/industry, 2004-2005 ..................... 93 III.1. Top 15 acquirers based in developing economies, cumulative, 1987-2005 .............................................. 110 III.2. Top 25 cross-border M&A deals by TNCs from developing and transition economies, 1987-2005 ...... 111 III.3. Number of greenfield and expansion FDI projects by firms based in developing and transition economies, by source region, 2002-2005 ........................................................ 112 III.4. Top 15 developing and transition economies in terms of stocks of outward FDI, 1980, 1990, 2000 and 2005 ................................................................................................... 113 III.5. Basic facts about the outward FDI stock of major developing and transition economies, 2005 or latest year available .................................................................................... 115 III.6. Outward FDI stock of developing and transition economies, by sector, 2004 ......................................... 116 III.7. Outward FDI stock of developing and transition economies, by sector and selected industries, 2004 . 117 III.8. FDI from developing and transition economies, 1985-2004 ...................................................................... 118 III.9. Inward FDI stock of developing and transition economies, by major country groups, 1990-2004 ....... 119 III.10. FDI from developing and transition economies to selected LDCs, various years ................................... 121 III.11. FDI projects undertaken by TNCs from developing or transition economies, by destination region, 2002-2005 ................................................................................................................. 121 III.12. Number of foreign affiliates of TNCs from developing and transition economies, selected developed host countries, various years........................................................................................ 121 III.13. Number of parent companies, selected developing economies, selected years........................................ 122 III.14. Top 20 TNCs, ranked by revenue and their activities, 2005 or latest available year .............................. 123 III.15. Top South African non-financial TNCs, ranked by sales, 2004 ................................................................. 125 III.16. Selected large “ethnic Chinese” companies in South-East Asia, ranked by market capitalization ........ 129 III.17. Largest TNCs from Latin America and the Caribbean, ranked by sales, 2004......................................... 133 III.18. Largest TNCs from South-East Europe and the CIS, ranked by sales, 2004 ............................................ 134 IV.1. Types of advantages possessed by developing-country TNCs, by sources of advantage ........................ 148 IV.2. Types of competitive advantages of developing-country TNCs, by sector............................................... 154 V.1. Top 10 cross-border M&A deals in the oil and gas industry by companies from developing and transition economies, ranked by the value of sales, 1987-2005 ..................................... 173 V.2. Balance-of-payments impact of FDI in the United States, selected developing home economies, 1992-2002 ......................................................................................................................... 179 V.3. Exports per unit of sales of affiliates of TNCs from developing and developed countries in 15 sub-Saharan African countries, by industry, 2005.......................................... 192 V.4. Selected indicators of employment by affiliates of TNCs from developing and developed countries in 15 sub-Saharan African countries, 2005 ............................................................... 194 V.5. Training expenditure per foreign affiliate in 15 sub-Saharan African countries, by size and origin of affiliate, 2005 ............................................................................................................. 194 VI.1. Economies with no controls on outward FDI, 2005 ................................................................................... 207 VI.2. TPOs and outward FDI promotion: results from a survey ......................................................................... 214 VI.3. Services offered by TPOs promoting outward FDI..................................................................................... 215 VI.4. IPAs known to have offices in developing or transition economies.......................................................... 223 A.I.1. Greenfield FDI projects, by investor/destination region, 2002-2005 ....................................................... 263 A.I.2. Estimated world inward FDI stock, by sector and industry, 1990 and 2004 ............................................ 266 A.I.3. Estimated world outward FDI stock, by sector and industry, 1990 and 2004 .......................................... 267 A.I.4. Estimated world inward FDI flows, by sector and industry, 1989-1991 and 2002-2004 ........................ 268 A.I.5. Estimated world outward FDI flows, by sector and industry, 1989-1991 and 2002-2004 ...................... 269 A.I.6. Number of parent corporations and foreign affiliates, by region and economy, latest available year ... 270 A.I.7. Cross-border M&A deals with values of over $1 billion completed in 2005 ........................................... 273 A.I.8. Selected 50 large cross-border M&As involving collective investment funds, completed during 1987-2005 ........................................................................................................................ 276 A.I.9. Inward FDI Performance and Potential Index rankings, 1990-2005 ......................................................... 277 A.I.10. Top 50 economies signatories of BITs and DTTs, concluded as of end 2005 .......................................... 279 A.I.11. The world’s top 100 non-financial TNCs, ranked by foreign assets, 2004 ............................................... 280 A.I.12. The top 100 non-financial TNCs from developing countries, ranked by foreign assets, 2004 ............... 283 A.I.13. The top 10 non-financial TNCs from South-East Europe and the CIS, ranked by foreign assets, 2004 ...................................................................................................................... 286 Page
Page The top TNCs.ranked by the UNCTAD Spread ded in 2005 38 onomy TNCs 291 DEFINITIONS AND SOURCES 293 4 General definitior 292 Transnational corporation 293 23 Foreign direct investment timate of FDI dat presented i 294 FDI fows FDI stocks Definitions and sources of the data in annex table B.3. 29 Definitions and sources of the data in annex tables B.4-B.7. 297 Pefiiigaggeiyorhehtaoaopcrmioasorforcignamiaite 297 Annex B and e 2003-2005 38 2003-2005.and FDI stocks r/purchaser. 2003-200 327 B.10 in the host 328 328 B.11 onomy and 329 B.12 329 B.13 330 B.14 B.15 orts of 330 331 B.16 in the ed the h 331 B.17 f foreig nomy and 332 B.18 economy and 332 B19 and offorei 332
xiv World Investment Report 2006. FDI from Developing and Transition Economies: Implications for Development A.I.14. The top 50 financial TNCs, ranked by the UNCTAD Spread Index, 2004 ............................................... 287 A.I.15. International Investment Agreements (other than BITs and DTTs) concluded in 2005 .......................... 288 A.I.16. International Investment Agreements (other than BITs and DTTs) under negotiation, as of end 2005................................................................................................................. 289 A.II.1. Big players in outward FDI from West Asia, 2005-June 2006 .................................................................. 290 A.V.1. Exports of foreign affiliates of developed- and developing-economy TNCs: share in host countries’ total exports............................................................................................................ 291 DEFINITIONS AND SOURCES ............................................................................................................. 293 A. General definitions ...................................................................................................................... 293 1. Transnational corporations ................................................................................................... 293 2. Foreign direct investment ..................................................................................................... 293 3. Non-equity forms of investment .......................................................................................... 294 B. Availability, limitations and estimates of FDI data presented in WIR ............................... 294 1. FDI flows ............................................................................................................................... 294 2. FDI stocks .............................................................................................................................. 295 C. Data revisions and updates ........................................................................................................ 295 D. Data verification .......................................................................................................................... 296 E. Definitions and sources of the data in annex table B.3 ......................................................... 296 F. Definitions and sources of the data in annex tables B.4-B.7 ................................................ 297 G. Definitions and sources of the data on operations of foreign affiliates in annex tables B.8-B.19 ............................................................................................................. 297 B.1. FDI flows, by region and economy, 2003-2005 .......................................................................................... 299 B.2. FDI stock, by region and economy, 1990, 2000, 2005 ............................................................................... 303 B.3. FDI flows as a percentage of gross fixed capital formation, 2003-2005, and FDI stocks as a percentage of gross domestic product, 1990, 2000, 2005, by region and economy ......................... 307 B.4. Cross-border M&As, by region/economy of seller/purchaser, 2003-2005 ............................................... 318 B.5. Cross-border M&As, by region/economy of seller/purchaser, 2003-2005 ............................................... 321 B.6. Cross-border M&As, by sector/industry, 2003-2005 .................................................................................. 325 B.7. Cross-border M&As, by sector/industry, 2003-2005 .................................................................................. 326 B.8. Number of foreign affiliates in the host economy and of foreign affiliates of home-based TNCs, 2001-2003 ................................................................................................................. 327 B.9. Assets of foreign affiliates in the host economy and of foreign affiliates of home-based TNCs, 2001-2003 ...................................................................................................................... 328 B.10. Employment of foreign affiliates in the host economy and of foreign affiliates of home-based TNCs, 2001-2003 ................................................................................................................. 328 B.11. Wages and salaries of foreign affiliates in the host economy and of foreign affiliates of home-based TNCs, 2001-2003 .............................................................................. 329 B.12. Sales of foreign affiliates in the host economy and of foreign affiliates of home-based TNCs, 2001-2003 ...................................................................................................................... 329 B.13. Value added of foreign affiliates in the host economy and of foreign affiliates of home-based TNCs, 2001-2003 ............................................................................... 330 B.14. Profits of foreign affiliates in the host economy and of foreign affiliates of home-based TNCs, 2001-2003 ............................................................................... 330 B.15. Exports of foreign affiliates in the host economy and of foreign affiliates of home-based TNCs, 2001-2003 ............................................................................... 331 B.16. Imports of foreign affiliates in the host economy and of foreign affiliates of home-based TNCs, 2001-2003 ............................................................................... 331 B.17. R&D expenditures of foreign affiliates in the host economy and of foreign affiliates of home-based TNCs, 2001-2003 ............................................................................... 332 B.18. Employment in R&D of foreign affiliates in the host economy and of foreign affiliates of home-based TNCs, 2001-2003 ............................................................................... 332 B.19. Royalty receipts and payments of foreign affiliates in the host economy and of foreign affiliates of home-based TNCs, 2001-2003 ........................................................................ 332 Page
ABBREVIATIONS XV ABBREVIATIONS ment ECLAC he co men OSUR Market Development ment community o
ABBREVIATIONS xv AGOA African Growth and Opportunity Act (of the United States) ASEAN Association of Southeast Asian Nations BIT bilateral investment treaty CARICOM Caribbean Community CIS Commonwealth of Independent States COMESA Common Market for Eastern and Southern Africa CSR corporate social responsibility DFI developoment finance institution DTT double taxation treaty ECA export credit agency ECLAC Economic Commission for Latin America and the Caribbean ECOWAS Economic Community of West African States EIU Economist Intelligence Unit EMU European Monetary Union EPA economic partnership agreement EU European Union FDI foreign direct investment FTA free trade agreement GATS General Agreement on Trade in Services (WTO Agreement) GCC Gulf Cooperation Council GDP gross domestic product GFCF gross fixed capital formation GLC government-linked company IAIGC Inter-Arab Investment Guarantee Corporation ICSID International Centre for Settlement of Investment Disputes ICT information and communications technology IDP investment development path IIA international investment agreement IPA investment promotion agency IPR intellectual property right ISDS investor-State dispute settlement ISO International Standards Organization IT information technolgy LAC Latin America and the Caribbean LDC least developed country M&A merger and acquisition MERCOSUR Mercado Común del Sur (Southern Common Market) MIGA Multilateral Investment Guarantee Agency MFA Multi-Fibre Arrangement MFN most-favoured nation NEPAD New Partnership for Africa's Development NIE newly industrializing economy NOI net outward investment OECD Organisation for Economic Co-operation and Development OEM original equipment manufacture PC personal computer R&D research and development SADC Southern African Development Community SAFE State Administration of Foreign Exchange (China) SAGIA Saudi Arabian General Investment Authority SME Small and medium-sized enterprises SPE special purpose entity TNC transnational corporation TPO Trade promotion organization TRIPS Trade-related Aspects of Intellectual Property Rights (WTO agreement) UNDP United Nations Development Programme UNIDO United Nations Industrial Development Organization WAIPA World Association of Investment Promotion Agencies WTO World Trade Organization ABBREVIATIONS