Trends and Drivers of Bilateral FDI Flows in Developing Asia
AbstractDeveloping countries are rapidly emerging as new and important sources of foreign direct investment (FDI) to other developing countries. While Asian companies have become significant foreign direct investors abroad, a large share of outward investments from Asia appears to have been recycled intraregionally. However, unlike trade flows, there has been little to no detailed examination of FDI flows between Asian economies at a bilateral level. This paper uses bilateral FDI flows data to investigate trends and patterns of intra-Asian FDI flows over the period 1990 to 2005. It also employs an augmented gravity model framework to examine the main determinants of intra-Asian FDI flows. A range of drivers of FDI flows, including transactional and informational distance (proxied by distance), real sector variables, financial variables and institutional quality are examined.
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Bibliographic InfoPaper provided by Hong Kong Institute for Monetary Research in its series Working Papers with number 112008.
Length: 30 pages
Date of creation: Nov 2008
Date of revision:
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Developing Asia; Distance; Foreign direct investment (FDI); Institutions; Intra-regional; Gravity model;
Find related papers by JEL classification:
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-07-20 (All new papers)
- NEP-DEV-2008-07-20 (Development)
- NEP-INT-2008-07-20 (International Trade)
- NEP-OPM-2008-07-20 (Open Economy Macroeconomic)
- NEP-SEA-2008-07-20 (South East Asia)
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- Rabin Hattari & Ramkishen S. Rajan, 2009. "Cross-border Mergers and Acquisitions (M&As) in Developing Asia: The Role of Financial Variables," Working Papers 362009, Hong Kong Institute for Monetary Research.
- Ramkishen Rajan & Rabin Hattari, 2009. "What Explains Intra-Asian FDI Flows?: Do Distance and Trade Matter?," Economics Bulletin, AccessEcon, vol. 29(1), pages 122-128.
- Chak Hung J. Cheng & Michael K. Salemi, 2009. "Feast and Famine: Explaining Big Swings in the Hong Kong Economy between 1981 and 2007," Working Papers 372009, Hong Kong Institute for Monetary Research.
- Ramkishen S. Rajan, . "Crises, Private Capital Flows and Financial Instability in Emerging Asia," MPDD Working Paper Series WP/09/06, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
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