THE IMPLICATIONS OF EMERGENCE OF CHINA TOWARDS ASEAN-5: FDI-GDP PERSPECTIVE

Puah, Chin-Hong and Kueh, Jerome Swee-Hui and Lau, Evan (2007): THE IMPLICATIONS OF EMERGENCE OF CHINA TOWARDS ASEAN-5: FDI-GDP PERSPECTIVE.

Abstract

The relationship between Foreign Direct Investment (FDI) and Gross Domestic Products (GDP) had become the centre piece of recent researches in identifying the short run and long run implications between the two variables. Using the hypotheses of FDI led GDP and GDP led FDI as theoretical framework, this study intends to analyze the implications of the rise of China towards the ASEAN-5 countries, namely Indonesia, Malaysia, the Philippines, Singapore and Thailand from the perspective of FDI and GDP. The cointegration and vector error correlation estimate test results showed that there is a significant positive long run relationship between FDI of China and GDP of ASEAN-5. However, we failed to detect any short run causal relationship among the variables under study.

• Item Type: MPRA Paper
• Institution: Universiti Malaysia Sarawak
• Language: English
• Keywords: Cointegration; Granger causality; FDI; ASEAN-5
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements

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