What does FDI outflow refer to?

FDI outflow specifically refers to capital investment made by a country’s residents or institutions to assets in foreign countries. This encompasses situations where a company based in one nation invests in business operations, real estate, or other assets located abroad. The term highlights the export of capital from the home country to foreign markets, illustrating how companies seek opportunities for growth, diversification, or accessing new markets in different geographical areas.

This concept is critically important in global business as it reflects the dynamics of international trade, the strategic initiatives of companies, and the economic relationships between nations. Such outflows can indicate economic strength and confidence in pursuing investment opportunities beyond domestic markets. Conversely, inbound FDI, which involves foreign capital entering a country, represents a different dynamic focused on investments being channeled into the home country rather than flowing outward.