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

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

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.

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Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 19 (2008)
Issue (Month): 1 (February)
Pages: 40-52

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Handle: RePEc:eee:asieco:v:19:y:2008:i:1:p:40-52
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