Supply-chain disruptions and new investment policies in the post-COVID-19 world
Initial insights from project-level data
The COVID 19 pandemic has inflicted a series of shocks on the global economy, not
least impacting global trade and investment. During the same time, several countries
adopted new foreign direct investment (FDI) related policies. This paper presents
novel preliminary evidence on the effects of these new FDI policies and COVID-19-related
supply-chain disruptions on cross-border investment. It employs, among others, granular
data on FDI policies and investment projects undertaken in a wide range of sectors
in 175 host economies worldwide by investors from 46 home countries. It finds that
a combination of FDI policies and COVID-19-related measures has a statistically significant
and economically meaningful negative effect on the probability of a new cross-border
greenfield investment project occurring during the sample period. The effect is the
strongest in sectors with high R&D intensity.
Available from July 31, 2023
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