Cronin, Bruce ORCID: https://orcid.org/0000-0002-3776-8924 (2026) Local network neighbourhood effects in foreign direct investment and economic resilience. Global Networks: A journal of transnational affairs, 26 (4):e70068. ISSN 1470-2266 (Print), 1471-0374 (Online) (doi:10.1111/glob.70068)

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Abstract

A growing literature examines the relationship between foreign direct investment (FDI) networks and economic development using measures of countries’ positions within the global investment system. While these studies provide valuable insights into the structure of international investment, they reveal little about how the configuration of countries’ immediate investment relationships influences development and resilience. This study addresses this gap by analysing the local FDI network neighbourhoods of 172 countries using annual IMF Coordinated Direct Investment Survey (CDIS) data for 2009–2024. Local network structure is characterised using measures of effective size, density and hierarchy, capturing diversity, embeddedness and concentration in countries’ inward and outward investment relationships. Two-way fixed-effects panel models demonstrate that the developmental implications of local network structure vary systematically across stages of development. Developing economies benefit from diverse outward investment neighbourhoods and dense inward investment communities, suggesting that access to heterogeneous external opportunities and embeddedness within investor networks both contribute to development. Local network effects are generally weaker in least-developed economies, consistent with constraints on the ability to exploit investment network opportunities. In advanced economies, outward investment structure is more important than inward investment structure, with dense and concentrated outward investment neighbourhoods associated with weaker development outcomes. These findings underline the importance of local FDI network structure for understanding economic development and resilience and suggest that policies should consider not only the volume of FDI but also the configuration of countries’ investment relationships.

Item Type:	Article
Additional Information:	Thanks to the participants in the University of Greenwich Networks and Urban Systems Centre research seminar 13.02.24, the Globalisation & Network Resilience Sunbelt Satellite Conference, Edinburgh, 24.06.2024, editors and anonymous reviewers of the Global Networks Special Issue on Globalisation and Network Resilience.
Uncontrolled Keywords:	foreign direct investment, social network analysis, ego networks, local network measures, international business
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HB Economic Theory
Faculty / School / Research Centre / Research Group:	Greenwich Business School Greenwich Business School > Networks and Urban Systems Centre (NUSC) Greenwich Business School > School of Business, Operations and Strategy
Last Modified:	11 Aug 2026 14:35
URI:	https://gala.gre.ac.uk/id/eprint/54018

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