IDEAS home Printed from https://ideas.repec.org/a/ids/ijecbr/v4y2012i1-2p116-131.html

Some new evidence on intra-industry trade and complex FDI in ASEAN countries: a spatial panel approach

Author

Listed:
  • Nathapornpan Piyaareekul Uttama

Abstract

This paper examines the interaction on intra-industry trade (IIT) and foreign direct investment (FDI) with special attention to the Association of Southeast Asian Nations (ASEAN). We introduce the 2×3×3 knowledge-capital model, recently proposed by Baltagi et al. (2007) and Uttama and Péridy (2009). The theoretical implications are suggested, not only how IIT is determined by country characteristics, such as similarity in market size and factor differentials, but also trade costs as well as regional economic integration. Moreover, it also empirically investigates the determinants of aggregated and disaggregated IIT in five ASEAN countries over the period 19952008, concerned with what extent complex FDIs boost IIT. Using spatial panel data model, we find the fact that the empirical results are consistent with the theoretical predictions. Vertical FDI tends to discourage ASEAN’s IIT, whereas complex horizontal FDI in neighbours tends to encourage its IIT in ASEAN.

Suggested Citation

  • Nathapornpan Piyaareekul Uttama, 2012. "Some new evidence on intra-industry trade and complex FDI in ASEAN countries: a spatial panel approach," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(1/2), pages 116-131.
    • Handle: RePEc:ids:ijecbr:v:4:y:2012:i:1/2:p:116-131
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=44248
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Hartmut Egger & Peter Egger & Michael Ryan, 2010. "Bilateral and Third‐Country Exchange Rate Effects on Multinational Activity," Review of International Economics, Wiley Blackwell, vol. 18(5), pages 1012-1027, November.
    2. Bernhofen, Daniel M., 1999. "Intra-industry trade and strategic interaction: Theory and evidence," Journal of International Economics, Elsevier, vol. 47(1), pages 225-244, February.
    3. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, December.
    4. Sawyer, William C. & Sprinkle, Richard L. & Tochkov, Kiril, 2010. "Patterns and determinants of intra-industry trade in Asia," Journal of Asian Economics, Elsevier, vol. 21(5), pages 485-493, October.
    5. Wakasugi, R., 1997. "Missing factors of intra-industry trade: Some empirical evidence based on Japan," Japan and the World Economy, Elsevier, vol. 9(3), pages 353-362, August.
    6. Xing, Yuqing, 2007. "Foreign direct investment and China's bilateral intra-industry trade with Japan and the US," Journal of Asian Economics, Elsevier, vol. 18(4), pages 685-700, August.
    7. Shahbaz, Muhammad & Leitão, Nuno Carlos, 2011. "Intra-industry trade: The Pakistan experience," MPRA Paper 28665, University Library of Munich, Germany.
    8. Baltagi, Badi H. & Egger, Peter & Pfaffermayr, Michael, 2007. "Estimating models of complex FDI: Are there third-country effects?," Journal of Econometrics, Elsevier, vol. 140(1), pages 260-281, September.
    9. Jose Caetano & Aurora Galego, 2007. "In Search for the Determinants of Intra-Industry Trade within an Enlarged Europe," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 5(2), pages 163-183.
    10. Xing, Yuqing, 2007. "Foreign direct investment and China's bilateral intra-industry trade with Japan and the US," Journal of Asian Economics, Elsevier, vol. 18(4), pages 685-700, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sawyer, William C. & Sprinkle, Richard L. & Tochkov, Kiril, 2010. "Patterns and determinants of intra-industry trade in Asia," Journal of Asian Economics, Elsevier, vol. 21(5), pages 485-493, October.
    2. Aggarwal, Sakshi, 2023. "Intra-industry trade: Revisiting theory and Literature Survey," MPRA Paper 117182, University Library of Munich, Germany.
    3. Lukasz Ambroziak, 2012. "FDI and intra-industry trade: theory and empirical evidence from the Visegrad Countries," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(1/2), pages 180-198.
    4. repec:idn:journl:v:1:y:2019:i:sp5:p:1-20 is not listed on IDEAS
    5. Ambroziak Łukasz, 2016. "FDI and Intra-industry Trade in the Automotive Industry in the New EU Member States," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 52(1), pages 23-42, December.
    6. Shinichi Furuzawa & Lily Kiminami, 2017. "Changes in the international specialization of food manufacturing industry in East Asia," Asia-Pacific Journal of Regional Science, Springer, vol. 1(2), pages 359-378, October.
    7. Clark, Don P., 2011. "Factor adjustment implications of a free trade agreement between the United States and Thailand," Journal of Asian Economics, Elsevier, vol. 22(3), pages 213-221, June.
    8. Sangcheol Song, 2015. "Inter-Country Exchange Rates and Intra-Firm Trade Flow Within Global Network of Multinational Corporations," Management International Review, Springer, vol. 55(1), pages 1-22, February.
    9. Nobuaki Hamaguchi & Silvio Miyazaki & Leonardo Correia, 2014. "State Space Application to Recent Automobile Sector Triangle Trade between Japan and Latin America," Discussion Paper Series DP2014-05, Research Institute for Economics & Business Administration, Kobe University.
    10. Badinger, Harald & Egger, Peter, 2013. "Spacey Parents and Spacey Hosts in FDI," Department of Economics Working Paper Series 154, WU Vienna University of Economics and Business.
    11. Mayer, T. & Mejean, I. & Nefussi, B., 2010. "The location of domestic and foreign production affiliates by French multinational firms," Journal of Urban Economics, Elsevier, vol. 68(2), pages 115-128, September.
    12. Petroulas, Pavlos, 2007. "The effect of the euro on foreign direct investment," European Economic Review, Elsevier, vol. 51(6), pages 1468-1491, August.
    13. Yuqing Xing, 2008. "Sino-Japanese Relations: The Dimensions of Trade and FDI," Working Papers EMS_2008_06, Research Institute, International University of Japan.
    14. Harald Badinger & Peter Egger, 2010. "Horizontal vs. Vertical Interdependence in Multinational Activity," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(6), pages 744-768, December.
    15. Kox, Henk L.M., 2022. "A micro-macro model of foreign direct investment: knowledge-based gravity forces, self-selection and third-country effects," MPRA Paper 115542, University Library of Munich, Germany.
    16. Steven Poelhekke & Frederick Van der Ploeg, 2008. "Growth, Foreign Direct Investment and Urban Concentrations: Unbundling Spatial Lags," CESifo Working Paper Series 2474, CESifo.
    17. Yuqing Xing, 2008. "FDI in China: Facts and Impacts on China and the World Economy," Working Papers EMS_2008_03, Research Institute, International University of Japan.
    18. Kox, Henk L.M., 2022. "Explaining foreign direct investment patterns: a testable micro-macro gravity model for FDI," MPRA Paper 115273, University Library of Munich, Germany.
    19. Baltagi, Badi H. & Egger, Peter H. & Kesina, Michaela, 2019. "Contagious exporting and foreign ownership: Evidence from firms in Shanghai using a Bayesian spatial bivariate probit model," Regional Science and Urban Economics, Elsevier, vol. 76(C), pages 125-146.
    20. Peter Egger & Simon Loretz & Michael Pfaffermayr & Hannes Winner, 2009. "Bilateral effective tax rates and foreign direct investment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(6), pages 822-849, December.
    21. Octavio Escobar, 2011. "The location pattern of FDI in Mexico after NAFTA," ERSA conference papers ersa10p804, European Regional Science Association.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijecbr:v:4:y:2012:i:1/2:p:116-131. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=310 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.