FDI in Greece & Greek FDI

FDI in Greece & Greek FDIChair: Professor Kevin Featherstone

Fragkiskos Filippaios, MEF Fellow Kostas Tzioumis, NBG Fellow

Hellenic Observatory Seminar Series

February 12th, 2008

OutlineGeneral (definition, trends, determinants)

FDI Inflow in Greece

FDI Outflow from Greece

Assessment & policy recommendations

DefinitionAn investment made to acquire lasting interest in enterprises operating outside of the economy of the investor.

Threshold of 10 per cent of equity ownership to qualify an investor as a foreign direct investor (OECD)

Forms of investment classified as FDI are equity capital, the reinvestment of earnings and the provision of long-term and short-term intra-company loans (between parent and affiliate enterprises).

Global trends

Improvements in crucial determinants of FDI: Institutions, taxation, liquidity, FX, etc.

Greek FDI inflows (1): A politicians view

Chart1

0.672

0.52

0.436

0.439

0.485

0.447

0.471

0.683

0.907

0.752

1.005

1.135

1.144

0.977

0.981

1.053

1.058

0.984

0.0712

0.5619

1.1081

1.5894

0.0503

1.2752332303

2.1014074364

0.6065015172

5.3634415755

Inward FDI in Greece, 1980-2006 Flows- Billion USD (current)

Greece ($current)

Page2_b

time_codecountry_codeoverall_earnmanag_rankingrankR2

YR2003Norway16

YR2003Sweden22

YR2003Denmark311

YR2003Austrial41

YR2003Switzerland513

YR2003Poland68

YR2003Italy715

YR2003Ireland83

YR2003Finland912

YR2003Belgium104

YR2003Netherlands1114

YR2003Germany125

YR2003Portugal137

YR2003Spain1416

YR2003UK159

YR2003France1610

YR2003Greece1717

PortugalYEARSpain

1.6919802.8

1.7919813.69

1.5419824.03

1.8619834.32

3.3119845.12

4.6919855.27

2.8119866.47

3.9919876.39

6.3419887.69

11.4319897.91

13.4219909.56

11.6719918

7.79199210.22

7.719938.55

6.0719948.26

2.6919956.28

4.9619967.24

8.3619977.15

9.56199810.24

3.55199912.35

21.76200026.38

20.35200117.94

5.65200221.81

24.6200310.83

5.8720048.53

10.0320057.58

17.2420065.4

Page2_b

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Accounting practices and stock markets, 2004 Stock market synchronicity, annual ranking [1=best]

Earnings management, annual ranking [1=best]

Sample: 17 countries

rankR2

Norway

Sweden

Denmark

Austrial

Switzerland

Poland

Italy

Ireland

Finland

Belgium

Netherlands

Germany

Portugal

Spain

UK

France

Greece

R2 = 18%

FDI inward flows

YEARGreece ($current)Greece ($current 000)YEARGreece (constant)Greece ($constant 000)Greece deflator

19800.67267219800.67267210.00

19810.5252019810.4762666143476.26661429591.0918254289.18

19820.43643619820.3912823015391.28230148791.114285001811.43

19830.43943919830.3856993587385.6993586711.138192195913.82

19840.48548519840.4158932255415.89322554421.166164703416.62

19850.44744719850.3734896551373.48965507221.196820297219.68

19860.47147119860.3814346734381.43467340351.234811706523.48

19870.68368319870.5299224646529.92246461471.288867797928.89

19880.90790719880.6787912645678.79126451171.336198692333.62

19890.75275219890.5442667288544.266728851.381675491338.17

19901.005100519900.7008539278700.85392779221.433964996343.40

19911.135113519910.7454776951745.47769514581.522513694852.25

19921.144114419920.7043198658704.31986581951.624262008762.43

19930.97797719930.5669332908566.93329080881.723306808572.33

19940.98198119940.5367789837536.77898374561.827567825382.76

19951.053105319950.5490204702549.02047018231.917961273291.80

19961.058105819960.5295292100.00

19970.98498419970.4726311104472.63111035152.0819619751108.20

19980.071271.219980.033241638533.24163849042.1418920135114.19

19990.5619561.919990.2558442575255.8442574692.1962580109119.63

20001.10811108.120000.497402789497.40278897982.2277719879122.78

20011.58941589.420010.7012896164701.28961635032.2663960266126.6396026611

20020.050350.320020.021969180421.9691804172.2895710739128.95710738981.0183200120022003200420052006

20031.27523323031275.233230327520030.5452434611545.24346113692.3388326889133.88326889211.0382Inflation, GDP deflator (annual %)1.833.823.493.443.733.38

20042.10140743642101.407436379820040.8808871889880.88718892252.3855579498138.55579497651.0349

20050.6065015172606.501517186520050.249258691249.25869104512.4332211432143.32211432361.0344

20065.36344157555363.44157551820062.1568681722156.86817200972.4866802919148.66802918791.03730.01830.03820.03490.03440.0373

1.01831.03821.03491.03441.0373

FDI inward flows

0

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0

0

0

0

0

0

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0

Inward FDI in Greece, 1980-2006 Flows- Billion USD (current)

Greece ($current)

FDI % of capital formation

0

0

0

0

0

0

0

0

0

0

0

0

0

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0

Inward FDI in Greece, 1980-2006 Flows- Billion USD (constant 1980 prices)

YEAR

YEARGreece ($current)Greece (inward FDI as % of gross fixed capital formation)YEARPortugalSpain

19800.048448419800.01690.028

19810.044444419810.01790.0369

19820.039439419820.01540.0403

19830.040940919830.01860.0432

19840.057557519840.03310.0512

19850.049649619850.04690.0527

19860.042642619860.02810.0647

19870.056156119870.03990.0639

19880.064364319880.06340.0769

19890.049149119890.11430.0791

19900.051751719900.13420.0956

19910.055755719910.11670.08

19920.053853819920.07790.1022

19930.051651619930.0770.0855

19940.052552519940.06070.0826

19950.048248219950.02690.0628

19960.043743719960.04960.0724

19970.04141019970.08360.0715

19980.00282819980.09560.1024

19990.019719719990.03550.1235

20000.041441420000.21760.2638

20010.056856820010.20350.1794

20020.00161620020.05650.2181

20030.028828820030.2460.1083

20040.039939920040.05870.0853

20050.011411420050.10030.0758

20060.090390320060.17240.054

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Inward FDI in Greece, 1980-2006 % of gross capital formation

Greece ($current)

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

Inward FDI: Greece,Portugal & Spain, 1980-2006 % of gross capital formation

Greece ($current)

Portugal

Spain

MBD00000514.unknown

MBD000008AE.unknown

MBD000AC3E8.unknown

MBD000AC3EC.unknown

MBD000AC3F0.unknown

MBD000B717B.unknown

MBD000AC3F1.unknown

MBD000AC3EE.unknown

MBD000AC3EF.unknown

MBD000AC3ED.unknown

MBD000AC3EA.unknown

MBD000AC3EB.unknown

MBD000AC3E9.unknown

MBD00000A80.unknown

MBD000AC3E6.unknown

MBD000AC3E7.unknown

MBD000AC3E5.unknown

MBD000009A6.unknown

MBD00000A24.unknown

MBD0000092A.unknown

MBD000006C2.unknown

MBD000007C2.unknown

MBD00000838.unknown

MBD00000748.unknown

MBD000005EC.unknown

MBD00000650.unknown

MBD0000056C.unknown

MBD00000156.unknown

MBD00000342.unknown

MBD0000043A.unknown

MBD000004B8.unknown

MBD000003BE.unknown

MBD00000256.unknown

MBD000002CC.unknown

MBD000001DC.unknown

MBD00000080.unknown

MBD000000E4.unknown

Greek FDI inflows (2): A clearer view

Sources of Inward FDI in Greece (2001):European Union: 70% [~50% from Luxembourg and Holland]Other European countries: 16%United States: 7%

Chart2

0.672

0.4762666143

0.3912823015

0.3856993587

0.4158932255

0.3734896551

0.3814346734

0.5299224646

0.6787912645

0.5442667288

0.7008539278

0.7454776951

0.7043198658

0.5669332908

0.5367789837

0.5490204702

0.529

0.4726311104

0.0332416385

0.2558442575

0.497402789

0.7012896164

0.0219691804

0.5452434611

0.8808871889

0.249258691

2.156868172

Inward FDI in Greece, 1980-2006 Flows- Billion USD (constant 1980 prices)

YEAR

Page2_b

time_codecountry_codeoverall_earnmanag_rankingrankR2

YR2003Norway16

YR2003Sweden22

YR2003Denmark311

YR2003Austrial41

YR2003Switzerland513

YR2003Poland68

YR2003Italy715

YR2003Ireland83

YR2003Finland912

YR2003Belgium104

YR2003Netherlands1114

YR2003Germany125

YR2003Portugal137

YR2003Spain1416

YR2003UK159

YR2003France1610

YR2003Greece1717