1945

The momentum for the expansion of international production continues to hold, though the world economy is currently affected by a number of factors that could discourage investment, including FDI by TNCs. FDI flows to developing countries declined in 1998, but that decline was confined to a few countries. Technology flows, as measured by technology payments, continued to grow, partly reflecting the increasing importance of technology in the production process. Cross-border M&As among developed countries have driven the expansion of FDI flows and international production capacity in 1998. This suggests that, in the face of diminished financing and reduced market prospects world-wide, TNCs in the Triad are concentrating on consolidating their assets and activities so as to strengthen their readiness for global expansion or survival once the health of the world economy, including countries affected by the recent financial crises and their aftermath, is fully restored.

Related Subject(s): International Trade and Finance
Sustainable Development Goals:
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