Abstract
In the past 10 to15 years, Western transnational corporations (TNCs) have been joined by at least three new players on the foreign direct investment (FDI) stage: sovereign wealth funds (SWFs), private equity firms and emerging market TNCs. This article considers how “new” these players are, their contribution to global FDI outflows, how they were affected by the financial crisis, and their likely future role. I conclude that, with a few exceptions, SWFs will continue to be marginal FDI players, despite their high visibility. Private equity firms will play a highly volatile role, varying from marginal at times to important at others. Emerging market TNCs, on the other hand, are already quite important and will become even more so, as emerging markets become prime movers of the global economy. I contend that this is to be welcomed, because emerging market TNCs contribute to sustainable development in ways that Western TNCs cannot, given their distinctive capabilities in making and selling products for price-sensitive customers, and their competence in some green technologies. In the long term, the financial crisis will prove merely to have accelerated the inevitable rise of emerging markets as both sources and destinations for FDI.
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