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Sectoral FDI cycles in South and East Asia

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  • Doytch, Nadia

Abstract

This study aims to analyze how sectoral foreign direct investment (FDI) inflows in South and East Asian economies respond to changes in the business cycles of the host countries, as measured by their output gaps. We focus on 15 economies during the period 1980–2011 and examine inflows of FDI in extractive industries, manufacturing and services in addition to aggregate FDI by using a dynamic panel Blundell–Bond GMM methodology. We find evidence of countercyclical behavior of services FDI and acyclical behavior of both extractive industries FDI and manufacturing FDI. The coutercyclical behavior of services FDI in South and East Asia has important policy implications.

Suggested Citation

  • Doytch, Nadia, 2015. "Sectoral FDI cycles in South and East Asia," Journal of Asian Economics, Elsevier, vol. 36(C), pages 24-33.
    • Handle: RePEc:eee:asieco:v:36:y:2015:i:c:p:24-33
    DOI: 10.1016/j.asieco.2014.12.002
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    2. Saidi, Samir & Mani, Venkatesh & Mefteh, Haifa & Shahbaz, Muhammad & Akhtar, Pervaiz, 2020. "Dynamic linkages between transport, logistics, foreign direct Investment, and economic growth: Empirical evidence from developing countries," Transportation Research Part A: Policy and Practice, Elsevier, vol. 141(C), pages 277-293.
    3. Nadia Doytch, 2022. "FDI: Hot or Cold Money? The Behaviour of Sectoral FDI Inflows and Outflows Over Periods of Growth Accelerations and Decelerations," Foreign Trade Review, , vol. 57(3), pages 324-350, August.
    4. Dong, Quan & Bárcena-Ruiz, Juan Carlos, 2015. "Does investment in capacity encourage FDI?," Economic Modelling, Elsevier, vol. 51(C), pages 58-64.
    5. Wang, Hao & Fidrmuc, Jan & Luo, Qi, 2021. "A spatial analysis of inward FDI and urban–rural wage inequality in China," Economic Systems, Elsevier, vol. 45(3).
    6. Doytch, Nadia & Uctum, Merih, 2019. "Spillovers from foreign direct investment in services: Evidence at sub-sectoral level for the Asia-Pacific," Journal of Asian Economics, Elsevier, vol. 60(C), pages 33-44.
    7. Nadia Doytch, 2016. "The Worldwide Shift of FDI to Services- How does it Impact Asia? New Evidence from Seventeen Asian Economies," Working Papers id:11372, eSocialSciences.
    8. Doytch, Nadia, 2021. "Do FDI inflows to Eastern Europe and Central Asia respond to the business cycle? A sector level analysis," The Journal of Economic Asymmetries, Elsevier, vol. 23(C).
    9. Tien-Chin Wang & Chia-Nan Wang & Xuan Huynh Nguyen, 2016. "Evaluating the Influence of Criteria to Attract Foreign Direct Investment (FDI) to Develop Supporting Industries in Vietnam by Utilizing Fuzzy Preference Relations," Sustainability, MDPI, vol. 8(5), pages 1-14, May.
    10. Hao Wang & Jan Fidrmuc & Qi Luo, 2020. "A Spatial Analysis of Inward FDI and Rural-Urban Wage Inequality: Evidence from China," CESifo Working Paper Series 8258, CESifo.
    11. Nadia Doytch & Nishant Yonzan & Ketan Reddy & Filip De Beule, 2021. "Tracking Greenfield FDI During the COVID-19 Pandemic: Analysis by Sectors," Foreign Trade Review, , vol. 56(4), pages 454-475, November.

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    More about this item

    Keywords

    Sectoral FDI; FDI cycles; Output gap;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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