Integration and Growth in East Asia
AbstractThis paper empirically analyzes the experience of East Asiaf s economic growth with data both at aggregate-economy and micro-firm levels, focusing on the role of international integration through trade and direct investment. The analysis within a framework of cross-country panel regression shows that trade openness and foreign direct investment (FDI) inflows have a positive effect on GDP growth -particularly in the 1970s and 1980s- while FDI outflows appear to have a negative effect on GDP growth. Micro-level evidence based on manufacturing data in the Republic of Korea (Korea) confirms the positive effect of trade and investment integration on plant-level productivity growth. It also suggests that the relationship between FDI outflows and productivity growth depends on the characteristics of a recipient economy. We find that FDI to the Peoplefs Republic of China tends to reduce productivity growth of firms in Korea, while FDI to the United States or Japan works in favor of productivity growth.
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Bibliographic InfoArticle provided by Institute for Monetary and Economic Studies, Bank of Japan in its journal Monetary and Economic Studies.
Volume (Year): 25 (2007)
Issue (Month): S1 (December)
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Postal: 2-1-1 Nihonbashi, Hongoku-cho, Chuo-ku, Tokyo 103
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More information through EDIRC
Integration; Growth; Trade; Foreign direct investment; East Asia;
Other versions of this item:
- F15 - International Economics - - Trade - - - Economic Integration
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
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