2013 Global Opportunity Index: Attracting Foreign Investment

Mar 18, 2013

Keith Savard and Heather Wickramarachi with Ross C. Devol and Apanard (Penny) Prabha

Publisher: Milken Institute

As a destination for direct foreign investment, China is rising - and the U.S. is falling. That's one of the findings in our newest report, The Global Opportunity Index: Attracting Foreign Investment.

Foreign direct investment (FDI) has never been more important in catalyzing growth, whether in the developed or developing world. It now accounts for 11 percent of global GDP and more than 80 million jobs worldwide. But which countries are creating the best environments to capture these growth-fuelling investments? Institute researchers have ranked the attractiveness for investment of 98 countries. Sixty-seven variables were assessed across five broad categories: economic fundamentals, regulatory barriers, ease of doing business, regulatory quality, and the rule of law.

Data available on our Global Opportunity Index interactive website.
Data available on our Global Opportunity Index interactive website.

Hong Kong and Singapore lead the index, with Canada, Switzerland, Australia and five members of the European Union rounding out the top ten. Second from the bottom is Venezuela; as the report notes, the nationalization of foreign firms pursued by the late President Hugo Chavez has made the country a "precarious location for FDI."

"The Global Opportunity Index helps identify opportunities for companies contemplating making investments of 'patient' capital," says Keith Savard, senior managing economist and one of the authors of the report. "For policy makers in the host countries, the Index helps illuminate policy changes that can be implemented quickly and often at low cost, in order to make their countries more attractive for FDI."

The rank of the United States? Twenty-two - one place behind France. In Europe's economically-troubled periphery, only Ireland remained in the top 10, while Greece plunged below China and many other emerging economies.

See the accompanying web tool that provides full access to the rankings, in each of the five categories, with an interactive feature that allows users to customize the rankings, screening for the investment factors that matter most to them.

Part of the Milken Institute's Access to Global Capital Initiative, "The Global Opportunity Index" was developed with the support of Liquidnet, an institutional trading network that facilitates trading in 41 markets globally.