Salike, Nimesh (2010): Effect of regional integration agreement on foreign direct investment : A theoretical perspective. Published in: Journal of Business and Behavioral Sciences (JBBS) , Vol. Volume, No. Number 1 (September 2010): pp. 211-226.
Download (99Kb) | Preview
This paper looked into inter- relationships between Regional Integration Agreement (RIA) and Foreign Direct Investment (FDI) from theoretical point of view. It tried to figure out the conducts of FDI after the formation of RIA from intra- regional and inter- regional perspective. The theoretical framework was developed from the cross- section tabulation of motives and modes of FDI. It is identified that multinationals have two basic rationales for their motives of investment abroad: tariff- jumping and internalization. Further, they conduct their decision of FDI through two modes: vertical and horizontal FDI. To study the distribution of FDI in individual economy after RIA, the study of “Attractiveness matrix” was carried out. It suggested that the flow of FDI depends upon the consequences of “Environmental change” and “Locational advantage” of the host economies within the region.
|Item Type:||MPRA Paper|
|Original Title:||Effect of regional integration agreement on foreign direct investment : A theoretical perspective|
|Keywords:||Regional integration, Tariff- jumping, Internalization, Vertical FDI, Horizontal FDI, Environmental change, Locational advantage|
|Subjects:||F - International Economics > F1 - Trade > F15 - Economic Integration
F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements
|Depositing User:||Nimesh Salike|
|Date Deposited:||27. Jun 2011 07:50|
|Last Modified:||14. Feb 2013 05:23|
ADB (2008). Emerging Asian Regionalism- A Partnership for Shared Prosperity. Mandaluyong Cigy, Philippines: Asian Development Bank.
Blomstrom M. & Kokko A. (1997). Regional Integration and Foreign Direct Investment. NBER Working Paper Series in Economics and Finance No. 172, National Bureau of Economic Research.
Blomstrom M., Kokko A. & Globerman S. (1998). Regional Integration and Foreign Direct Integration, The North American Experience. NBER Working Paper Series in Economics and Finance No. 269, National Bureau of Economic Research.
Caves R.E. (1996) Multinational Enterprise and Economic Analysis: Cambridge University Press.
Das, D.K. (2007). South Asian Free Trade Agreement: Prospects For Shallow Regional Integration. Working Paper No.143, Asia Research Centre.
Globerman S. & Schwindt R. (1996). International Trade Agreements and Foreign Direct Investment in the Agri-Industrial Sector. Report prepared for Agriculture and Agri-Food Canada, mimeo, May.
Hagen J.V. and Zhang H. (2009). International Capital Flows and World Output Gains. Singapore Management University.
Kawai M. & Urata S. (2002). Trade and Foreign Direct Investment in East Asia. Paper presented at Conference on “Linkages in East Asia: Implications for Currency Regimes and Policy Dialogue”, Seoul 23-24, 2002.
Kim Z.K. (2000). The Effects of International Economic Integration on FDI Determinants: Japanese and US FDI in Europe. Texas A & M- Corpus Christi, USA.
OECD. (2001). Regional Integration Agreements. Organisation for Economic Co-operation and Development
UNCTAD. (1998). World Investment Report- Trends and determinants. United Nations Conference on Trade and Development.
UNCTAD. (2003). World Investment Report 2003: FDI Policies for Development. United Nations Conference on Trade and Development.
Urata S. & Kawai H. (2000). The Determinants of the Location of Japanese Foreign Direct Investment by Japanese Small and Medium- sized Enterprises. Small Business Economics 15, 79-103.
Yeyati, E. L., Stein E. & Daude C. (2002). Regional Integration and the Location of FDI. Integration and Regional Programs Department, Research Department, Inter- American Development Bank.