Advanced Search
MyIDEAS: Login

FDI in Crisis and Recovery: Lessons from the 1997-98 Asian Crisis

Contents:

Author Info

  • Prema-chandra Athukorala

    ()

Abstract

Is foreign direct investment (FDI) more resilient at the onset of an economic crisis and the subsequent economic collapse in a given host country compared to other forms of foreign capital inflows? Are affiliates of multinational enterprises in a crisis-hit country better equipped to withstand a crisis and to aid the recovery process by readjusting their investment, production and sales strategies compared to local firms? This paper examines these and related issues in the context of the 1997-98 economic crisis in East Asia. The paper starts with a scene setting surveys of FDI policy and the overall investment climate in the five crisis-hit countries (Thailand, Malaysia, Indonesia, Korea and the Philippines), with emphasis on changes in investment policy introduced as part of the crisis management package. It then looks at the behaviour of FDI compared to other forms of capital flow after the onset of the crisis, followed by an examination of trends in FDI flows in the recovery process and the comparative performance of affiliates of multinational enterprises (MNEs) in economic adjustment. The findings suggest that FDI was indeed a relatively stable source of foreign capital in the crisis context and that MNE affiliates were instrumental in ameliorating the severity of economic collapse and facilitating the recovery process.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp2003/wp-econ-2003-04.pdf
Download Restriction: no

Bibliographic Info

Paper provided by The Australian National University, Arndt-Corden Department of Economics in its series Departmental Working Papers with number 2003-04.

as in new window
Length: 24 pages
Date of creation: 2003
Date of revision:
Handle: RePEc:pas:papers:2003-04

Contact details of provider:
Postal: Crawford Building, Lennox Crossing, Building #132, Canberra ACT 0200
Phone: +61 2 6125 4705
Fax: +61 2 6125 5448
Email:
Web page: https://crawford.anu.edu.au/acde/publications/
More information through EDIRC

Related research

Keywords: East Asia; financial crisis; foreign direct investment; capital flows;

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Robert E. Lipsey, 2001. "Foreign Direct Investors in Three Financial Crises," NBER Working Papers 8084, National Bureau of Economic Research, Inc.
  2. Frankel, Jeffrey A. & Rose, Andrew K., 1996. "Currency crashes in emerging markets: An empirical treatment," Journal of International Economics, Elsevier, vol. 41(3-4), pages 351-366, November.
  3. Steven Radelet & Jeffrey D. Sachs, 1998. "The East Asian Financial Crisis: Diagnosis, Remedies, Prospects," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 1-90.
  4. Eric Ramstetter, 2000. "Survey of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 36(3), pages 3-47.
  5. Anne Krueger & Aaron Tornell, 1999. "The Role of Bank Restructuring in Recovering from Crises: Mexico 1995-98," Harvard Institute of Economic Research Working Papers 1872, Harvard - Institute of Economic Research.
  6. Robert E. Lipsey & Robert C. Feenstra & Carl H. Hahn & George N. Hatsopoulos, 1999. "The Role of Foreign Direct Investment in International Capital Flows," NBER Chapters, in: International Capital Flows, pages 307-362 National Bureau of Economic Research, Inc.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. FERRAGINA, Anna Maria, 2013. "The Impact of FDI on Firm Survival and Employment: A Comparative Analysis for Turkey and Italy," CELPE Discussion Papers 127, CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy.
  2. Prema-chandra Athukorala & Juthathip Jongwanich, 2012. "How Effective are Capital Controls? Evidence from Malaysia," Departmental Working Papers 2012-16, The Australian National University, Arndt-Corden Department of Economics.
  3. Vintila Denisia Mariana, 2011. "Foreign Direct Investments During Financial Crises," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 41-45, December.
  4. Sajid Anwar & Desh Gupta, 2006. "Financial Restructuring and Economic Growth in Thailand," Global Economic Review, Taylor & Francis Journals, vol. 35(1), pages 113-127.
  5. Kornkarun Cheewatrakoolpong & Somprawin Manprasert, 2012. "Trade concentration and crisis spillover: Case study of transmission of the supprime crisis to Thailand," Working Papers 11212, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
  6. Varum, Celeste Amorim & Rocha, Vera Catarina Barros, 2011. "Do foreign and domestic firms behave any different during economic slowdowns?," International Business Review, Elsevier, vol. 20(1), pages 48-59, February.
  7. Desh Gupta & Milind Sathye, 2004. "Financial Developments in India: Should India introduce capital account convertibility?," ASARC Working Papers 2004-07, The Australian National University, Australia South Asia Research Centre.
  8. Adalgiso Amendola & Anna Maria Ferragina & Rosanna Pittiglio & Filippo Reganati, 2012. "Are exporters and multinational firms more resilient over a crisis? First evidence for manufacturing enterprises in Italy," Economics Bulletin, AccessEcon, vol. 32(3), pages 1914-1926.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pas:papers:2003-04. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.