Structural Changes, Causality, and Foreign Direct Investments: Evidence from the Asian Crises of 1997
AbstractThis study attempts to determine three things: (1) whether structural changes or shifts exist in the outward foreign direct investment (FDI) data from OECD countries to eight Asian countries, (2) if a linkage exists across OECD FDI flow patterns, and (3) whether the determinants of FDI are consistently the same during the different periods as determined by structural breaks. In order to estimate the structural breaks, Bai and Perron's (1998, 2003) model is utilized because it allows for more than one break in the data. Because the time of the 19971998 Asian financial crisis is of interest, the breaks are associated with this event. The results of the principal component analysis show that the signs of the explanatory variables differ from those previously found in the literature. The correlation coefficients between FDI and trade openness, the most significant explanatory variable in the study, are positive and significant for all countries and all periods with the exception of Thailand during the pre pre-crisis period. For most of the periods studied, some sort of Granger causality seemed to exist between FDI and trade openness, mostly in the form of feedback.
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Bibliographic InfoArticle provided by De Gruyter in its journal Global Economy Journal.
Volume (Year): 9 (2010)
Issue (Month): 4 (January)
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Web page: http://www.degruyter.com
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- Nikolaos Antonakakis & Gabriele Tondl, 2011.
"Do determinants of FDI to developing countries differ among OECD investors? Insights from Bayesian Model Averaging,"
FIW Working Paper series
- Antonakakis, Nikolaos & Tondl, Gabriele, 2012. "Do determinants of FDI to developing countries differ among OECD investors? Insights from Bayesian model averaging," Discussion Papers 1/12, Europa-Kolleg Hamburg, Institute for European Integration.
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