PARIS - new OECD data and analysis show that global Foreign Direct Investment (FDI) slowed down in 2022, but new investment showed modest growth.

Global FDI flows dropped by 24% in 2022 (or by 5% excluding Luxembourg), to USD 1 286 billion, compared to the previous year. The United States remained the top destination for FDI inflows worldwide (USD 318 billion), followed by China (USD 180 billion), despite lower flows. Cross-border M&A activity slowed down with fewer deals being concluded and the outlook for greenfield investment activity remained positive

Key findings include that:

- Global FDI flows dropped by 24% in 2022, to USD 1 286 billion, after large withdrawals of capital by a telecommunication MNE operating in Luxembourg. Excluding Luxembourg, global FDI flows declined by 5% in 2022 compared to the previous year.

- Major FDI recipients recorded lower FDI flows in 2022, particularly China and the United States partly as a result of reduced new investment activity.

- The United States and China were the top two FDI destinations worldwide in 2022, followed by Brazil, receiving peak level of inflows partly due to increased reinvestment of earnings.

- FDI inflows in OECD economies fell by 26% due to disinvestments from Luxembourg, which were in part offset by large increases in Switzerland and the United Kingdom. FDI inflows in non-OECD G20 economies dropped by 38%, mainly reflecting decreases in China.

- FDI outflows from OECD and non-OECD G20 countries plunged by 14% and 28%, respectively.
Cross-border M&A activity slowed down with fewer deals being concluded in 2022, possibly in response to a tighter financial environment and continued geopolitical challenges.

Policy Toolkit for Strengthening FDI and SME Linkages

Strengthening linkages between foreign direct investment (FDI) and small and medium-sized enterprises (SMEs) is important to boost productivity and innovation across countries and regions in the OECD and beyond. This policy toolkit offers policy advice to national and subnational governments on how to increase knowledge and technology benefits from FDI on domestic SMEs and the local economy. It presents a conceptual framework for understanding the main enabling conditions and diffusion channels of FDI-SME linkages and spillovers, and a set of diagnostic tools to assess the spillover potential. It also provides an assessment tool for policy and institutional frameworks enabling FDI-SME linkages. This toolkit benefits from insights of a pilot mapping of policy initiatives across the 27 EU Member States, which are described in the second part of the report.

To download the report, visit