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Foreign Direct Investment In Asean Countries, 1990-2012

Listed author(s):
  • BHATT, P.R.
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    The objectives of the paper are to study foreign trade and investment dimensions of ASEAN and to study the role of FDI to the growth of exports. Vector autoregression model (VAR) is adopted to estimate the long run causal relationship between exports, foreign direct investment and GDP. The cointegration test result shows that there exists a long run equilibrium relationship between exports, FDI and GDP. It is found from the estimated Error Correction Model that FDI is a significant variable and the result indicates that 1 unit increase in FDI in ASEAN will lead to 1.1 units increase in exports. Wald Test indicates that there is a bilateral relationship between Exports and FDI but unilateral relationship between FDI and GDP and the direction is from FDI to GDP which means that FDI causes GDP.

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    File URL: http://www.usc.es/econo/RGE/Vol23/rge23411c.pdf
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    Article provided by University of Santiago de Compostela. Faculty of Economics and Business. in its journal Revista Galega de Economía.

    Volume (Year): 23 (2014)
    Issue (Month): 4 ()
    Pages:

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    Handle: RePEc:sdo:regaec:v:23:y:2014:i:4_11
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    Avda Xoan XXIII S/N, 15704 Santiago de Compostela

    Web page: http://www.usc.es/econo/RGE/benvidag.htm

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    1. Barry, Frank & Bradley, John, 1997. "FDI and Trade: The Irish Host-Country Experience," Economic Journal, Royal Economic Society, vol. 107(445), pages 1798-1811, November.
    2. Hubert Janicki & Phanindra Wunnava, 2004. "Determinants of foreign direct investment: empirical evidence from EU accession candidates," Applied Economics, Taylor & Francis Journals, vol. 36(5), pages 505-509.
    3. Noorbakhsh, Farhad & Paloni, Alberto & Youssef, Ali, 2001. "Human Capital and FDI Inflows to Developing Countries: New Empirical Evidence," World Development, Elsevier, vol. 29(9), pages 1593-1610, September.
    4. John Dunning, 2001. "The Eclectic (OLI) Paradigm of International Production: Past, Present and Future," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(2), pages 173-190.
    5. Nguyen Thanh Xuan & Yuqing Xing, 2008. "Foreign direct investment and exports," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(2), pages 183-197, 04.
    6. Kravis, Irving B. & Lipsey, Robert E., 1982. "The location of overseas production and production for export by U.S. multinational firms," Journal of International Economics, Elsevier, vol. 12(3-4), pages 201-223, May.
    7. Stephen P. Ferris & G. Rodney Thompson & Calin Valsan, 1994. "Foreign Direct Investment in an Emerging Market Economy: The Case of Romania," Eastern European Economics, M.E. Sharpe, Inc., vol. 32(4), pages 81-95, August.
    8. Jorge M. Andraz, 2010. "What causes economic growth in Portugal: exports or inward FDI?," Journal of Economic Studies, Emerald Group Publishing, vol. 37(3), pages 267-287, August.
    9. Blomstrom, Magnus & Persson, Hakan, 1983. "Foreign investment and spillover efficiency in an underdeveloped economy: Evidence from the Mexican manufacturing industry," World Development, Elsevier, vol. 11(6), pages 493-501, June.
    10. Thornton, John, 1996. "Cointegration, causality and export-led growth in Mexico, 1895-1992," Economics Letters, Elsevier, vol. 50(3), pages 413-416, March.
    11. Veugelers, Reinhilde, 1991. "Locational Determinants and Ranking of Host Countries: An Empirical Assessment," Kyklos, Wiley Blackwell, vol. 44(3), pages 363-382.
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