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Transactions: A New Look at Services Sector Foreign Direct Investment in Asia

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  • Jacob Funk Kirkegaard

    (Peterson Institute for International Economics)

Abstract

This paper presents new micro-level data consisting of individual greenfield investment projects and mergers and acquisitions as a source for detailed analysis of services sector cross-border investment flows among the Asian Development Bank (ADB) regional membership in Asia. The new transactional foreign direct investment (FDI) data are methodologically distinct from traditional BPM5-compliant FDI data but found to yield generally comparable aggregates, when compared with the latest available International Monetary Fund (IMF) data from the Comprehensive Direct Investment Survey for the ADB regional membership. The services sectors are found to receive considerably larger amounts of foreign investment, when compared with the Asian region's manufacturing and raw materials sectors. OECD countries account for roughly three-quarters of total recorded inward services sector FDI of about $2 trillion, relatively evenly split between the United States, the EU-27, and regional OECD-level-income countries. The presence of sizable regional "upward flowing" services sector investments into OECD-level-income economies is verified. Preliminary policy conclusions are drawn based on the new transactional FDI data results concerning prospects for regional services sector liberalization, threshold income levels for inward services sector FDI, upward-flowing regional services FDI, and preferred modes of services sector investments.

Suggested Citation

  • Jacob Funk Kirkegaard, 2012. "Transactions: A New Look at Services Sector Foreign Direct Investment in Asia," Working Paper Series WP12-16, Peterson Institute for International Economics.
    • Handle: RePEc:iie:wpaper:wp12-16
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    References listed on IDEAS

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    Cited by:

    1. Anita Prakash (ed.), 2019. "Asia-Europe Connectivity Vision 2025: Challenges and Opportunities," Books, Economic Research Institute for ASEAN and East Asia (ERIA), number 978-602-8660-91-4, July.
    2. Sarah Bauerle Danzman, 2016. "Contracting with Whom? The Differential Effects of Investment Treaties on FDI," International Interactions, Taylor & Francis Journals, vol. 42(3), pages 452-478, May.
    3. Peter W. Daniels & Pengfei Ni, 2014. "Urbanisation and changes in the sectoral structure of economic development: the scale of the manufacturing sector in Chinese cities and the shift towards service industry," Working Papers hal-00943972, HAL.

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    More about this item

    Keywords

    Services sector FDI; East Asia; greenfield; M&A; upward-flowing FDI;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L8 - Industrial Organization - - Industry Studies: Services
    • N75 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Asia including Middle East
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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