Cheong, David and Plummer, Michael (2009): FDI Effects of ASEAN Integration. Published in: Région et Développement , Vol. 29, (30. June 2009): pp. 50-67.
Download (179kB) | Preview
For the past two decades, ASEAN Member States have pursued intra-regional market liberalization in order to provide more flexibility to multinationals and therefore promote the region as a competitive production platform. Attracting FDI has been a key objective of this regional project. This paper describes and analyzes recent trends in FDI to and among ASEAN countries, mainly comparing FDI patterns before and after the Asian Crisis, to characterize and assess the region‟s strategies to liberalize and facilitate investment. We find that FDI flows to ASEAN countries suffered after the Asian Crisis but have picked up since 2005. Moreover, ASEAN FDI is dominated by Singapore. In addition, the sectoral distribution of FDI has changed in some members of ASEAN (i.e., Malaysia, Singapore, and Thailand) but not in others. We also perform an econometric analysis of the determinants of FDI to check for ASEAN-specific changes in FDI in the post-Crisis period. Our results, after controlling for a host of factors, indicate that ASEAN countries suffered a fall in total FDI but experienced an increase in intra-regional FDI after 1998. Moreover, we do not find any significant impact of FDI in China on ASEAN FDI.
|Item Type:||MPRA Paper|
|Original Title:||FDI Effects of ASEAN Integration|
|Keywords:||Association of South-east Asian Nations (ASEAN); Foreign Direct Investment (FDI); Economic Integration; Knowledge Capital Model|
|Subjects:||F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F42 - International Policy Coordination and Transmission
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements
F - International Economics > F3 - International Finance > F36 - Financial Aspects of Economic Integration
|Depositing User:||David Cheong|
|Date Deposited:||22. Oct 2010 02:03|
|Last Modified:||12. Feb 2013 06:45|
Arumugam, Rajenthran (2006), “An Overview of Foreign Direct Investment: Legal Rudiments In ASEAN”, Regional Outlook, 2006/2007, Institute of SouthEast Asian Studies, 81-84.
ASEAN (2006), “ASEAN Statistical Pocketbook 2006”, Jakarta: ASEAN Secretariat.
Baltagi, B., Egger, P., and Pfaffermayr, M. 2007), “Estimating Models of Complex FDI: Are There Third-Country Effects?”, Journal of Econometrics, 140(1), 260-281.
Blonigen, Bruce A. and Wang, Miao Grace (2004), “Inappropriate Pooling of Wealthy and Poor Countries in Empirical FDI Studies”, NBER Working Paper No. W10378.
Busakorn, C., Fung K.C., Iizaka, H., and Siu, A. (2005), “The Giant Sucking Sound : Is China Diverting Foreign Direct Investment from Other Asian Countries?”, Asian Economic Papers, 3(3), Fall, 122-140.
Dunning, J., and Peter Robson (eds.) (1988), Multinationals and the European Community, Oxford, Blackwell.
Lee, C. and Plummer, M. G. (2004), “Economic Development in China and Its Implications for East Asia,” University of Hawaii at Manoa Working Paper.
Lipsey, Robert E. (2003), “Foreign Direct Investment and the Operations of Multinational Firms: Concepts, History, and Data,” in E. Kwan Choi and James Harrigan (eds.), Handbook of International Trade, Blackwell, Oxford, UK.
Markusen, James R, (1995), “The Boundaries of Multinational Enterprises and the Theory of International Trade”, Journal of Economic Perspectives, 9(2), 169-189.
Markusen, James R. (2002), Multinational Firms and the Theory of International Trade, Cambridge, MIT Press.
Naya, S. F., and Plummer, M. G. (2005), “The Economics of the Enterprise for ASEAN Initiative”, Singapore, Institute of Southeast Asian Studies, November.
Prasad, E., Kose, M.A, Rogoff, K. S., and Wei, S. J. (2006), “Financial Globalization: A Reappraisal”, NBER Working Paper 12484.