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Determinants of FDI Flows into Indonesia and Singapore

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  • Jai S. Mah
  • Sang-Chul Yoon

Abstract

This paper reveals the determinants of FDI flows into Indonesia and Singapore. The empirical evidence based on the small sample cointegration test shows that, in case of Singapore, market size appears to influence FDI inflows positively and significantly, while production factor costs are revealed not to influence those. For Indonesia, neither market size nor wage is revealed to be significant, while interest rate is revealed to have a positive and statistically significant effect on those. This result discredits the sweatshop labor argument relating to FDI flows into developing countries.

Suggested Citation

  • Jai S. Mah & Sang-Chul Yoon, 2010. "Determinants of FDI Flows into Indonesia and Singapore," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 13(1), pages 63-73, March.
    • Handle: RePEc:sae:intare:v:13:y:2010:i:1:p:63-73
    DOI: 10.1177/223386591001300104
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    References listed on IDEAS

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    1. Asiedu, Elizabeth, 2002. "On the Determinants of Foreign Direct Investment to Developing Countries: Is Africa Different?," World Development, Elsevier, vol. 30(1), pages 107-119, January.
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    Cited by:

    1. Mohd IRSHAD & Syed Hasan QAYED, 2022. "Casual nexus between economic growth, FDI and employment: An inquiry into BRICS and ASEAN," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(631), S), pages 107-124, Summer.

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