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Behavioral and empirical perspectives on FDI: International capital allocation across Asia

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  • Brooks, Douglas H.
  • Roland-Holst, David
  • Zhai, Fan

Abstract

We investigate Asia's recent experience in international capital allocation through flows of foreign direct investment. A calibrated general equilibrium model with a new capital flow modelling component is applied to highlight underlying relationships between a Heckscher-Ohlin (labor and capital) endowment perspective and such considerations as human capital, productivity, endogenous growth, and institutional behavior. Our results support the argument that all these factors played a role in Asia's recent growth, to different degrees in different countries, with complex relationships to investment incentives. In addition, new directions for further research in the FDI-growth linkages policy area are identified.

Suggested Citation

  • Brooks, Douglas H. & Roland-Holst, David & Zhai, Fan, 2008. "Behavioral and empirical perspectives on FDI: International capital allocation across Asia," Journal of Asian Economics, Elsevier, vol. 19(1), pages 40-52, February.
  • Handle: RePEc:eee:asieco:v:19:y:2008:i:1:p:40-52
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    Cited by:

    1. Levent VURGUN & Furkan METİN, 2013. "Evaluation of the Adequacy of the Trade Theories' Assumptions to Explain the Impact of NICs/Regions on International Trade," Sosyoekonomi Journal, Sosyoekonomi Society, issue 20(20).
    2. de Boyrie Maria E, 2010. "Structural Changes, Causality, and Foreign Direct Investments: Evidence from the Asian Crises of 1997," Global Economy Journal, De Gruyter, vol. 9(4), pages 1-40, January.
    3. Sun, Ling & Fulginiti, Lilyan E. & Chen, Yo-Chan, 2010. "Taiwanese industry competitiveness when outward FDI is defensive," Journal of Asian Economics, Elsevier, vol. 21(4), pages 365-377, August.

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