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Accounting for Outward Direct Investment from Hong Kong and Singapore: Who Controls What?


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  • Linda Low
  • Eric D. Ramstetter
  • Henry Wai-Chung Yeung


After a brief introduction and examination of the economic rationale for accounting for foreign direct investment (FDI), we survey information on outward investors from Hong Kong and Singapore with the aim of illuminating the implications of accounting for such FDI by geographical source or by country of ultimate beneficial owner. By any measure it is clear that a large part of FDI from these economies comes from foreign-controlled firms and hence that ownership-based estimates of FDI from these two economies would be much smaller than the standard, geography-based estimates. However, because outward investment by foreign firms in Hong Kong and Singapore often involves sub- stantial contributions from local staff and partners, an attempt is made to examine the extent of control over investment decisions exercised by these local staff and partners. Case studies from Hong Kong indicate a tendency for for local control over investment decisions to be relatively strong in 4 types of foreign-controlled Hong Kong firms, recently acquired firms, firms with strong local entrepreneurial involvement, customer-oriented firms, and relocated holding companies. On the other hand, evidence froma sample of Thai affiliates of foreign-controlled Hong Kong or Singapore investors suggested that many of the investors were acting as part of an integrated network of foreign investors. Thus, although it is clear local staff and partners have a large influence over the investment decisions of foreign-controlled outward investors in Hong Kong and Singapore, it does not appear that such firms are a majority among foreign-controlled investors in these economies.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5858.

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Date of creation: Dec 1996
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Publication status: published as Linda Low, Eric D. Ramstetter, and Henry Wai-Chung Yeung. "Accounting for Outward Direct Investment from Hong Kong and Singapore: Who Controls What?" Geography and Ownership as Bases for Economic Accounting. Editedby Robert E. Baldwin, Robert E. Lipsey, and J.David Richardson, Chicago, Ill: The Univ. of Chicago Press, 1998, pp.139-168.
Handle: RePEc:nbr:nberwo:5858

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  1. Hill H, 1991. "Multinationals and employment in Indonesia," ILO Working Papers, International Labour Organization 282608, International Labour Organization.
  2. W-C H Yeung, 1994. "Hong Kong firms in the ASEAN region: transnational corporations and foreign direct investment," Environment and Planning A, Pion Ltd, London, vol. 26(12), pages 1931-1956, December.
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Cited by:
  1. Lipsey, Robert E. & Sjöholm, Fredrik, 2011. "South-South FDI and Development in East Asia," Working Papers, Lund University, Department of Economics 2011:30, Lund University, Department of Economics.
  2. Hiro Lee & Dominique van der Mensbrugghe, 2001. "A General Equilibrium Analysis of the Interplay between Foreign Direct Investment and Trade Adjustments," Discussion Paper Series, Research Institute for Economics & Business Administration, Kobe University 119, Research Institute for Economics & Business Administration, Kobe University, revised Jul 2001.
  3. Gnanaraj Chellaraj & Keith Maskus & Aaditya Mattoo, 2009. "Labor Skills and Foreign Investment in a Dynamic Economy: Estimating the Knowledge-Capital Model for Singapore," School of Economics Working Papers, University of Adelaide, School of Economics 2009-21, University of Adelaide, School of Economics.
  4. Helen Simpson, 2012. "How do Firms’ Outward FDI Strategies Relate to their Activity at Home? Empirical Evidence for the UK," The World Economy, Wiley Blackwell, Wiley Blackwell, vol. 35(3), pages 243-272, 03.
  5. Sjöholm, Fredrik, 2013. "Foreign Direct Investments in Southeast Asia," Working Papers, Lund University, Department of Economics 2013:37, Lund University, Department of Economics.
  6. Helen Simpson, 2008. "Investment Abroad and Adjustment at Home: evidence from UK multinational firms," The Centre for Market and Public Organisation, Department of Economics, University of Bristol, UK 08/207, Department of Economics, University of Bristol, UK.


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