Working Paper

How Global is FDI? Evidence from the Analysis of Theil Indices


  • Bickenbach
  • F.
  • Liu
  • W.-H.
  • Nunnenkamp
  • P.
Publication Date

It is open to question whether the intensified worldwide competition for FDI has reduced its traditionally strong concentration in a few large and relatively advanced host countries. We calculate and decompose Theil indices to track changes in absolute and relative concentration of FDI during the period 1970-2013. We find that both absolute and relative concentration decreased when excluding offshore financial centers from the overall sample. In addition to the narrowing gap between OECD and non-OECD countries, the concentration across non-OECD countries declined – for major subgroups and for both the absolute and relative measures. Finally, recent developments indicate that low-income countries are no longer at the losing end of the competition for FDI.

Kiel Institute Experts


JEL Classification

Key Words

  • ausländische Direktinvestitionen
  • concentration
  • foreign direct investment
  • Theil decomposition