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The determinants of bilateral FDI: Is Asia different?

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  • Petri, Peter A.

Abstract

Intra-Asian foreign direct investment (FDI) is dominated by flows from high technology economies to medium technology economies, while FDI elsewhere primarily consists of flows among high technology economies. This distinctive pattern is not due simply to differences in the relative distribution of Asian FDI recipients by technology, or to systematic differences in Asia's technology characteristics. A gravity model analysis is used to explore whether Asian FDI patterns differ significantly from those elsewhere, and if so, in what ways. The results show that Asian FDI flows, in contrast to other FDI flows, systematically favor hosts with relatively low technology achievement and relatively strong intellectual property rights regimes. This type of “Asian exceptionalism” is consistent with “flying geese” theories that have argued that Asian development is the result of technology flows among economies that occupy nearby rungs of the technology ladder.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 23 (2012)
Issue (Month): 3 ()
Pages: 201-209

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Handle: RePEc:eee:asieco:v:23:y:2012:i:3:p:201-209

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Web page: http://www.elsevier.com/locate/asieco

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Keywords: Foreign direct investment; FDI; Asia; Technology transfer; Gravity model;

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References

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Cited by:
  1. Anderson, Kym & Strutt, Anna, 2013. "Emerging Economies, Productivity Growth, and Trade with Resource-Rich Economies by 2030," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 152134, Australian Agricultural and Resource Economics Society.
  2. Anderson, Kym & Strutt, Anna, 2013. "South America’s Contribution to World Food Markets: GTAP Projections to 2030," Working Papers 145369, International Agricultural Trade Research Consortium.
  3. Kym Anderson & Anna Strutt, 2014. "Implications for Indonesia of Asia's Rise in the Global Economy," Departmental Working Papers 2014-10, The Australian National University, Arndt-Corden Department of Economics.
  4. Lipsey, Robert E. & Sjöholm, Fredrik, 2011. "South–South FDI and Development in East Asia," Asian Development Review, Asian Development Bank, vol. 28(2), pages 11-31.
  5. Enrique L. Kato-Vidal, 2013. "Foreign Investment and Wages: A Crowding-Out Effect in Mexico," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 50(2), pages 209-231, November.
  6. Kamel ABDELLAH ( GREThA, CNRS, UMR 5113 & ISG, UNIVERSITE DE TUNIS) & Dalila NICET-CHENAF (GREThA, CNRS, UMR 5113) & Eric ROUGIER (GREThA, CNRS, UMR 5113), 2012. "FDI and macroeconomic volatility: A close-up on the source countries," Cahiers du GREThA 2012-21, Groupe de Recherche en Economie Théorique et Appliquée.
  7. Dalila Nicet-Chenaf & Eric Rougier, 2014. "Source and host country volatility and FDI: A gravity analysis of European investment to Middle East and North Africa," Working Papers hal-00985795, HAL.

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