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Regional blocks and imperial legacies: mapping the global offshore FDI network

journal contribution
posted on 2023-06-08, 19:57 authored by Daniel HaberlyDaniel Haberly, Dariusz Wójcik
While foreign direct investment (FDI) is generally assumed to represent long-term investments within the real economy, approximately 30–50 percent of global FDI is accounted for by networks of offshore shell companies created by corporations and individuals for tax and other purposes. To date, there has been limited systematic research on the global structure of these networks. Here we address this gap by employing principal component analysis to decompose the global bilateral FDI anomaly matrix into its primary constituent subnetworks. We find that the global offshore FDI network is highly globalized, with a centralized core of jurisdictions in Northwest Europe and the Caribbean exercising a largely homogenous worldwide influence. To the extent that the network is internally differentiated, this appears to primarily reflect a historic layering of social and political relationships. We identify four primary offshore FDI subnetworks, bearing the imprint of four key processes and events: European, particularly UK colonialism, the post–WWII hegemonic alliance between the United States and Western Europe, the fall of Soviet communism, and the rise of Chinese capitalism. We also find evidence of qualitative, but not quantitative, variation in offshore FDI based on national rule of law and communist history.

History

Publication status

  • Published

File Version

  • Published version

Journal

Economic Geography

ISSN

0013-0095

Publisher

Wiley

Issue

3

Volume

91

Page range

251-280

Department affiliated with

  • International Relations Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2015-02-05

First Compliant Deposit (FCD) Date

2021-03-04

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