Determinants of foreign direct investment and volatility in South East Asian economies (original) (raw)
Outward foreign direct investment and the financial crisis in developing East Asia
Asian Development Review: Studies of Asian and …, 2009
This paper examines two interrelated aspects of Asian economic dynamism and the management of external shocks, in the context of outward foreign direct investment (FDI) from developing East Asia. Outward FDI from these economies has been growing rapidly, driven by deeper economic integration, more open FDI regimes, growing technological and financial sophistication, and rising savings levels. The paper underlines these common region-wide determinants while pointing to a range of country-specific circumstances. Economic crises, such as the Asian financial crisis of 1997-1998 and the current global financial crisis, have large and unpredictable effects on the behavior of FDI and other forms of capital flow, with the general expectation that FDI will be less volatile than portfolio investment. This has been confirmed in both crisis episodes. Investment outcomes during the current crisis have accelerated the growing importance of developing East Asia in the global economy.
Determinants of FDI inflow in Asia
Journal of Emerging Economies and Islamic Research
The research analyses the determinants of FDI inflow in Asia for the period 1993-2013 and is based on the fixed effect model. The macroeconomic factors included are lending rate, GDP per capita, trade openness, debt, exchange rate, money supply and unemployment rate. The country specific factors included are adult literacy rate, gross fixed capital formation, domestic credit provided by the financial sector, environmental pollution and natural resources rents. The study applies panel unit root tests, panel cointegration analysis and panel regression analysis based on the fixed effect model to ascertain the significance of macroeconomic and country specific factors on FDI inflow in Asia. The study found that lending rate, trade openness and money supply have a positive significance to FDI per capita whereas debt, unemployment rate and environmental pollution have a negative significance to FDI per capita.
Foreign Direct Investments in Southeast Asia
The Handbook of Southeast Asian Economics, 2014
Foreign direct investment has been of great importance in economic growth and global economic integration over the last decades. South East Asia has been part of this development with rapidly increasing inflows of FDI. However, there are large variations over time and between countries in the region as regard to the policies towards FDI, and in actual inflows of FDI. This chapter aims at examining the size of FDI in South East Asia and the trends in it. The main determinants of FDI in Southeast Asia as well as their effect on the host countries are also discussed and examined.
FDI and Government Policy in light of the Asian Financial Crisis
FDI investment continues to play a large role in creating new jobs in East Asia. This paper examines the relationship between FDI, exchange rate changes, and infrastructure spending on job creation before and after the Asian Financial Crisis. The relevant literature on the subject has been reviewed and a statistical analysis has been carried out. The findings show that one unit of FDI created more jobs before the Asian Financial Crisis but mainly due to the contribution of other factors such as government infrastructure spending which augmented financial inflows. After the crisis FDI effect on job creation decreased as an absolute value, but due to the decrease in other contributing factors a greater percentage of new employment became reliant on FDI as its source. Secondary findings include the effect that exchange rate changes have had on FDI levels and job creation, namely that they differ before and after the crisis. As well, infrastructure spending has becomes an ever more important factor in attracting FDI after the financial crisis.
MACROECONOMIC FACTORS OF FDI INFLOWS IN ASIAN ECONOMIES: A STUDY OF 14 ASIAN COUNTRIES.
International Journal of Advanced Research (IJAR), 2019
The study conducted to analyze the relationship between foreign direct investment and macroeconomic factors, which were affecting foreign direct investment in Asian economies over the period of 2003 to 2017. The fixed effect model applied in order to anticipate the foreign direct investment inflow into the overall Asian economies and simple regression analysis organized for each economy individually to determine the foreign direct investment inflow. The result of the fixed effect model presented strong evidence that trade openness has a statistically significant and affirmative association with foreign direct investment inflow into different Asian economies. On the other hand, exchange rate found closer to significance with foreign direct investment inflow. However, the macroeconomic variables of the study jointly and significantly affected foreign direct investment inflow. The results of simple regression analysis found that GDP, trade openness, and exchange rate have a significant impact on foreign direct investment inflow in China, Indonesia, Jordan, Pakistan, and Vietnam. Meanwhile, labor cost and tax rate have positive significance to foreign direct investment in Hong Kong and Philippines. The conclusive remarksare that macroeconomic factors played a significant and decisive role to attract foreign direct investment in the Asian region and in each country as well.
2018
The purpose of this research is to analyze the Determination of Foreign Direct Investment (FDI) As a Comparison of Macroeconomic Factors in Asean 5, China and Japan. Besides, this research also analyses the influence of macroeconomic factors due to the strength of the influence of macroeconomic factors to the shock. This research uses the secondary data during the period of 1996-2015 by using the Panel Data model. The variable, which is used here, is the macroeconomic factor (Broad Money, Economic Development, labor force, exchange rate, industry, transport service) that has an effect on Foreign Direct Investment in Asean 5, China and Japan. The gap of this research is to connect the macroeconomic factor (Broad Money, Economic Development, labor force, exchange rate, industry, transport service) that has an effect on Foreign Direct Investment. The result of the research shows that the macroeconomic factors have positive effect in ASEAN 5 countries, China and Japan as Home Country, a...
DETERMINANTS Of FDI INFLOWS IN SIX ASEAN COUNTRIES IN 1998-2016
Journal of Economic Empowerment Strategy (JEES)
Investment is an important element of the growth and the development of economic. Foreign Direct Investment (FDI) is one of the investment sources as an alternative to the Domestic Investment that might be difficult to be fulfilled by a country itself. The increased numbers of FDI inflows to ASEAN countries turns out were not evenly distributed to each country. This research is important to determine the development and determinants of FDI inflows in six ASEAN countries in the period of 1998-2016. From the panel data regression analysis, it can be concluded that the variable levels of corruption negatively affect the FDI inflows, while the level of economic freedom and income per capita has a positive effect on FDI inflows in six ASEAN countries in 1998-2016.
Journal of Economic Development, Environment and People
The purpose of this research is to analyse the Determination of Foreign Direct Investment (FDI) As a Comparison of Macroeconomic Factors in Asean 5, China and Japan. Besides, this research also analyses the influence of macroeconomic factors due to the strength of the influence of macroeconomic factors to the shock.This research uses the secondary data during the period of 1996-2015 by using the Panel Data model. The variabel which is used here is the macroeconomic factor (Broad Money, Economic Development, labor force, exchange rate, industry, transport service) that has an affect on Foreign Direct Investment in Asean 5, China and Japan.The gap of this research is to connect the macroeconomic factor (Broad Money, Economic Development, labor force, exchange rate, industry, transport service) that has an affect on Foreign Direct Investment. The result of the research shows that the macroeconomic factors have positive effect in ASEAN 5 countries, China and Japan as Home Country, as we...
The Dynamics And Determinants Of Foreign Direct Investment In Selected Asean Countries
2019
One of the goals of economic integration is to open the economy to the outside and attract investors who, through their expenses, stimulate economic growth. An example of such a mechanism is The Association of Southeast Asian Nations - ASEAN. Founded in 1967, the organization now brings together 10 countries. Over 50 years of operation shows the significant impact of closer cooperation on the level of foreign investment. It was particularly significant in this context to implement the ASEAN Investment Agreement - AIA Council and the Free Trade Area ASEAN - AFTA (1992). Integration of a single market helped to create a dynamic process of free movement of goods, services, and free flow of capital and, as a result, attracted more foreign direct investment (FDI). A dozen or so years later, foreign investment is still clearly increasing, contributing to the region's growing importance in the world. The aim of the article is to present the level and dynamics of FDI stock in the years ...
Foreign Direct Investment (FDI) equity inflow is important country's economic development. Association of South East Asian Nations (ASEAN) brings 11% of FDI equity flows to India. This by volume is considerably significant. This share is continuously increasing. There are several factors that determine the FDI equity inflows to a country. Empirical evidence proves the importance of gross capital formation, trade position of the country with partners, import and export trade openness, debt position, gross savings and inflation as potential determinants of FDI equity inflows from ASEAN to India. The objective of this paper is to analyses some of the potential determinants of FDI equity inflows from ASEAN to India during the period 2000 to 2012. An econometric model is used to find out the determinants of FDI equity inflows. The time frame for this analysis is 12-year period from January 2000 to January 2012, based on data availability. Majority of the explanatory variables specified in the econometric model found to be significant in attracting FDI while some variables are found to be non-significant in this case.