IDEAS home Printed from https://ideas.repec.org/p/phd/rpseri/rps_1994-10.html
   My bibliography  Save this paper

Foreign Direct Investment in the Philippines: A Reassessment

Author

Listed:
  • Aldaba, Rafaelita M.

Abstract

Recognizing the importance of an outward-oriented policy approach, countries such as Malaysia, Indonesia, Thailand and the Philippines have liberalized their regulation on foreign direst investment by introducing various guarantees and incentives. The Philippines, however, lagged behind its neighbors. This study identifies the factors that may explain why the Philippines has failed to capture its share of FDIs. Analysis indicates that our trade policy being strongly for import substitution has contributed to the rather unimpressive direct investments. The high level of protection in the manufacturing industry though inappropriate has encouraged the setting-up of local production that resulted to resource misallocation and loss of consumer welfare. In fact, FDI flows in the country have been concentrated in the following highly protected industries: chemicals, processed food, transport equipment, machinery and appliances, textiles and garments, basic metal products and petroleum and coal. Regression results support a positive relationship between FDI and the level of protection, stock of public investment real gross domestic product and real effective exchange rate.

Suggested Citation

  • Aldaba, Rafaelita M., 1994. "Foreign Direct Investment in the Philippines: A Reassessment," Research Paper Series RPS 1994-10, Philippine Institute for Development Studies.
    • Handle: RePEc:phd:rpseri:rps_1994-10
    as

    Download full text from publisher

    File URL: https://www.pids.gov.ph/publication/research-paper-series/foreign-direct-investment-in-the-philippines-a-reassessment
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brewer, Thomas L., 1991. "Foreign direct investment in developing countries : patterns, policies, and prospects," Policy Research Working Paper Series 712, The World Bank.
    2. Hal Hill, 1990. "Foreign Investment and East Asian Economic Development," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 4(2), pages 21-58, September.
    3. Reinhilde Veugelers, 1991. "Locational Determinants and Ranking of Host Countries: An Empirical Assessment," Kyklos, Wiley Blackwell, vol. 44(3), pages 363-382, August.
    4. Brecher, Richard A. & Diaz Alejandro, Carlos F., 1977. "Tariffs, foreign capital and immiserizing growth," Journal of International Economics, Elsevier, vol. 7(4), pages 317-322, November.
    5. Buiter, W.H., 1988. "Some Thoughts On The Role Of Fiscal Policy In Stabilisation And Structural Adjustment In Developing Countries," Papers 312, London School of Economics - Centre for Labour Economics.
    6. International Monetary Fund, 1985. "Foreign Private Investment in Developing Countries," IMF Occasional Papers 1985/001, International Monetary Fund.
    7. Florian A. Alburo, 1988. "TNCs and Structural Change in the Philippines," UP School of Economics Discussion Papers 198811, University of the Philippines School of Economics.
    8. Hal Hill & Prema-chandra Athukorala, 1998. "Foreign Investment in East Asia: A Survey," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 12(2), pages 23-50, November.
    9. repec:bla:kyklos:v:44:y:1991:i:3:p:363-82 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Austria, Myrna S., 1998. "The Emerging Philippine Investment Environment," Discussion Papers DP 1998-27, Philippine Institute for Development Studies.
    2. Ma. Laarni D. Revilla, 2016. "Cross-country Econometric Study on the Impact of Fiscal Incentives on FDI," Working Papers id:11472, eSocialSciences.
    3. Revilla, Ma. Laarni D., 2016. "Cross-Country Econometric Study on the Impact of Fiscal Incentives on Foreign Direct Investment," Research Paper Series DP 2016-17, Philippine Institute for Development Studies.
    4. Revilla, Ma. Laarni D., 2016. "Cross-Country Econometric Study on the Impact of Fiscal Incentives on Foreign Direct Investment," Discussion Papers DP 2016-17, Philippine Institute for Development Studies.
    5. repec:phd:pjdevt:jpd_1998_vol__xxv_no__1-b is not listed on IDEAS
    6. Medalla, Erlinda M. & Austria, Myrna S., 1996. "A Study on the Trade and Investment Policies of Developing Countries: The Case of the Philippines," Discussion Papers DP 1996-03, Philippine Institute for Development Studies.
    7. Mr. Nigel A Chalk, 2001. "Tax Incentives in The Philippines: A Regional Perspective," IMF Working Papers 2001/181, International Monetary Fund.

    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. repec:ilo:ilowps:282608 is not listed on IDEAS
    2. Axel Borrmann & Rolf Jungnickel, 1992. "Foreign investment as a factor in Asian Pacific integration," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 27(6), pages 282-288, November.
    3. René Belderbos & Jianglei Zou, 2006. "Foreign Investment, Divestment and Relocation by Japanese Electronics Firms in East Asia," Asian Economic Journal, East Asian Economic Association, vol. 20(1), pages 1-27, March.
    4. Jeffrey D. Sachs, 1989. "Introduction to "Developing Country Debt and the World Economy"," NBER Chapters, in: Developing Country Debt and the World Economy, pages 1-34, National Bureau of Economic Research, Inc.
    5. Steinherr, Alfred & Cisotta, Alessandro & Klar, Erik & Sehovic, Kenan, 2006. "Liberalizing Cross-Border Capital Flows: How Effective Are Institutional Arrangements against Crisis in Southeast Asia," Working Papers on Regional Economic Integration 6, Asian Development Bank.
    6. Bolling, H. Christine, 1992. "The European Community Presence in U.S. Agriculture," Foreign Agricultural Economic Report (FAER) 147998, United States Department of Agriculture, Economic Research Service.
    7. Roger Farrell, 2000. "Japanese Foreign Direct Investment in the World Economy 1951-1997," Asia Pacific Economic Papers 299, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
    8. Jaime de Melo & David Tarr, 2015. "VERs under imperfect competition and foreign direct investment: A case study of the US–Japan auto VER," World Scientific Book Chapters, in: Modeling Developing Countries' Policies in General Equilibrium, chapter 22, pages 461-483, World Scientific Publishing Co. Pte. Ltd..
    9. Jiancai Pi & Xinyi Liu & Jun Yin, 2025. "The impacts of privatization on employment, wages, and welfare in the presence of an informal sector," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 74(1), pages 1-28, March.
    10. Chaudhuri, Sarbajit & Mukherjee, Ujjaini, 2002. "Removal of protectionism, foreign investment and welfare in a model of informal sector," Japan and the World Economy, Elsevier, vol. 14(1), pages 101-116, January.
    11. Gabrielle Antille & Fabrizio Carlevaro & Nicolas Schmitt & Simon Fraser, 1990. "Europe 1992 and Beyond: Towards a Quantitative General Equilibrium Assessment for Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 126(III), pages 193-213, September.
    12. Kim, Kwan S., 1997. "Income distribution and poverty: An interregional comparison," World Development, Elsevier, vol. 25(11), pages 1909-1924, November.
    13. Pi, Jiancai & Zhou, Yu & Yin, Jun, 2013. "International factor mobility, monopolistic competition, and wage inequality," Economic Modelling, Elsevier, vol. 33(C), pages 326-332.
    14. Lisa M. Schineller, 1997. "A nonlinear econometric analysis of capital flight," International Finance Discussion Papers 594, Board of Governors of the Federal Reserve System (U.S.).
    15. Bourguignon, F. & De Melo, J. & Suwa, A., 1990. "Distributional Effects of Adjustment Policies: Simulations for Two Archetype Economies," DELTA Working Papers 90-31, DELTA (Ecole normale supérieure).
    16. Argentino Pessoa, 2008. "Multinational Corporations, Foreign Investment, and Royalties and License Fees: Effects on Host-Country Total Factor Productivity," Notas Económicas, Faculty of Economics, University of Coimbra, issue 28, pages 6-31, December.
    17. Grossman, Gene M., 1984. "The gains from international factor movements," Journal of International Economics, Elsevier, vol. 17(1-2), pages 73-83, August.
    18. Gene Grossman & Elhanan Helpman, 1994. "Foreign Investment with Endogenous Protection," NBER Working Papers 4876, National Bureau of Economic Research, Inc.
    19. Marjit, Sugata & Beladi, Hamid, 2003. "Possibility or impossibility of paradoxes in the small country Harris-Todaro framework: a unifying analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 379-385, October.
    20. Beladi, Hamid & Yabuuchi, Shigemi, 2001. "Tariff-induced capital inflow and welfare in the presence of unemployment and informal sector," Japan and the World Economy, Elsevier, vol. 13(1), pages 51-60, January.
    21. Shigehisa Kasahara, 2004. "The Flying Geese Paradigm: A Critical Study Of Its Application To East Asian Regional Development," UNCTAD Discussion Papers 169, United Nations Conference on Trade and Development.

    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:phd:rpseri:rps_1994-10. 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: Michael Ralph M. Abrigo (email available below). General contact details of provider: https://edirc.repec.org/data/pidgvph.html .

    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.