The report finds that:
Global FDI flows declined in 2012 to below the pre-economic crisis level, due mainly to economic fragility and policy uncertainty for investors.
In 2012 - for the first time ever - developing economies absorbed more FDI than developed countries. In addition, they generated almost one third of global FDI outflows.
As well as providing key economic intelligence for policymakers and other investment stakeholders, this year's WIR focuses on global value chains (GVCs) and their role in development.
The report shows how GVCs form a nexus between trade and investment: The vast majority of global trade is linked to the international production networks of transnational corporations, which are increasingly segmented between locations and countries. Goods circulate from one country to another as they are transformed from raw materials into finished products with higher value added. This process offers new opportunities to less-wealthy countries, but also poses some risks.
The report argues that to move up these value chains, developing nations must better coordinate investment and trade policy. Ultimately, the trend towards more complex value chains could enable these nations to expand their economies and to create more and better-paying jobs. The report also proposes a social and environmental governance framework for GVCs to help countries maximize the development benefits of international production.