The impact of COVID-19 on FDI

The objective of this paper is to discover the impact of the pandemic on global, regional FDIs and FDIs in different groups of countries classified according to their income status. The World Pandemic Uncertainty Index was used as a measure of the level of pandemic uncertainty. Multiple panel data analysis was conducted, which covered the period 1996-2020 and 142 countries, including sub-samples of six regions and four groups of countries classified as per their income level. The results have shown that the pandemic had a negative, but insignificant impact on global FDIs. The analysis also proved that the pandemic had a significant negative impact on FDIs in Europe and low-income countries, while positive impact in Asian and upper-middle-income countries. As for Africa, North and South America, and Australia and Pacific and high and lower middle income, the research has shown that the pandemic had an insignificant, but negative impact on FDI flows.