The global environment for FDI continued to improve in 2006. Macroeconomic growth continued, stock prices remained firm and profitability improved. In addition, new players made their presence more strongly felt. Multinational enterprises based in developing or emerging economies became more active acquirers of enterprises in the OECD area and new categories of financial investors, such as private equity companies, allocated large amounts of money to corporate takeovers. Reflecting this, FDI flows to and from OECD countries increased significantly in 2006, outflows by 29 per cent to USD 1 120 billion and inflows by 22 per cent to USD 910 billion. These are the secondhighest levels in the history of OECD, exceeded only in the boom year 2000. The numbers were lifted by a small number of very large crossborder mergers and acquisitions. The biggest five such transactions valued at close to USD 120 billion. There may be reasons to fear the potential impact on FDI of growing public concerns about the impact of globalisation. Business allegations of cross-border investment being dissuaded by hostile attitudes in the host country have also become more frequent. On balance, however, it appears that the negative political undercurrents have not yet translated into a slowdown of direct investment flows.