Transactions: A New Look at Services Sector Foreign Direct Investment in Asia
AbstractThis paper presents new micro-level data consisting of individual greenfield investment projects and mergers and acquisitions as a source for detailed analysis of services sector cross-border investment flows among the Asian Development Bank (ADB) regional membership in Asia. The new transactional foreign direct investment (FDI) data are methodologically distinct from traditional BPM5-compliant FDI data but found to yield generally comparable aggregates, when compared with the latest available International Monetary Fund (IMF) data from the Comprehensive Direct Investment Survey for the ADB regional membership. The services sectors are found to receive considerably larger amounts of foreign investment, when compared with the Asian region's manufacturing and raw materials sectors. OECD countries account for roughly three-quarters of total recorded inward services sector FDI of about $2 trillion, relatively evenly split between the United States, the EU-27, and regional OECD-level-income countries. The presence of sizable regional "upward flowing" services sector investments into OECD-level-income economies is verified. Preliminary policy conclusions are drawn based on the new transactional FDI data results concerning prospects for regional services sector liberalization, threshold income levels for inward services sector FDI, upward-flowing regional services FDI, and preferred modes of services sector investments.
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Bibliographic InfoPaper provided by Peterson Institute for International Economics in its series Working Paper Series with number WP12-16.
Date of creation: Oct 2012
Date of revision:
Services sector FDI; East Asia; greenfield; M&A; upward-flowing FDI;
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
- L8 - Industrial Organization - - Industry Studies: Services
- N75 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Asia including Middle East
- O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
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- OCHIAI Ryo & Philippa DEE & Christopher FINDLAY, 2007. "Services in Free Trade Agreements," Discussion papers 07015, Research Institute of Economy, Trade and Industry (RIETI).
- Philippa Dee, 2007.
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- Philippa Dee, 2005. "East Asian Economic Integration and its Impact on Future Growth," Asia Pacific Economic Papers 350, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
- Philippa Dee, 2005. "East Asian Economic Integration and its Impact on Future Growth," Development Economics Working Papers 21988, East Asian Bureau of Economic Research.
- Theodore H. Moran, 2011. "Foreign Direct Investment and Development: Launching a Second Generation of Policy Research: Avoiding the Mistakes of the First, Reevaluating Policies for Developed and Developing Countries," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 6000.
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