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Article analysis:

The article argues that foreign direct investment (FDI) data should be viewed with a more critical eye, as it often reflects tax avoidance strategies rather than real investment in plant and equipment abroad. The author notes that FDI statistics are often dominated by "phantom" investments made by special purpose entities located in tax centers, which can distort the true picture of financial integration. The article also highlights the role of reinvested earnings in inflating FDI data, particularly for US firms investing abroad.

While the article provides a useful critique of how FDI data is often interpreted, it could benefit from exploring some counterarguments or alternative perspectives. For example, while tax avoidance may be a significant driver of FDI flows, there may also be other factors at play such as market access or strategic considerations. Additionally, while the author notes that mergers and acquisitions account for much of the recent FDI activity, they do not explore why this might be the case or whether it has any implications for economic growth or development.

The article also seems to have a somewhat negative view of financial globalization overall, suggesting that rising globalization may simply reflect more tax arbitrage rather than real integration. While there are certainly risks associated with financial globalization (such as increased volatility and contagion), there are also potential benefits such as increased access to capital and technology transfer.

Overall, while the article raises some important points about how FDI data can be misleading, it could benefit from exploring alternative perspectives and considering both the potential risks and benefits of financial globalization.