Continuity and Change in Global Capital Flows Since 1914

Kevan Harris

In the large body of literature on foreign direct investment (FDI), the causes and effects of transnational investment are usually generalized outside of spatial and temporal considerations. Yet some of the main changes in the world economy in the twentieth century directly related to relative levels of investment flows and the shifting relationships between FDI origins and destinations. These flows did not always increase linearly in tandem with production. In the US case, outward FDI in 1914 already amounted to the same percentage of United States GNP as in 1966 (Arrighi 1994: 241). Global FDI flows retracted during the two world wars and cross-border investment remained below the 1914 level even in 1967. By the 1980s, though, private capital flows again emerged as a major type of transnational financial enterprise. These temporal and spatial shifts in investment flows were embedded in their global social and political environments. New data on FDI from the Organization for Economic Co-operation and Development (2005) point to major recent changes in capital flows. Using this data and other sources, I have constructed three global maps of cross-border FDI for 1914, 1967, and 2003. - CONTINUITY AND CHANGE IN GLOBAL CAPITAL FLOWS SINCE 1914

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