Effect of regional integration agreement on foreign direct investment : A theoretical perspective
This paper looked into inter- relationships between Regional Integration Agreement (RIA) and Foreign Direct Investment (FDI) from theoretical point of view. It tried to figure out the conducts of FDI after the formation of RIA from intra- regional and inter- regional perspective. The theoretical framework was developed from the cross- section tabulation of motives and modes of FDI. It is identified that multinationals have two basic rationales for their motives of investment abroad: tariff- jumping and internalization. Further, they conduct their decision of FDI through two modes: vertical and horizontal FDI. To study the distribution of FDI in individual economy after RIA, the study of “Attractiveness matrix” was carried out. It suggested that the flow of FDI depends upon the consequences of “Environmental change” and “Locational advantage” of the host economies within the region.
|Date of creation:||16 Jun 2010|
|Publication status:||Published in Journal of Business and Behavioral Sciences (JBBS) Number 1.Volume(2010): pp. 211-226|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Blomström, Magnus & Kokko, Ari, 1997.
"Regional Integration and Foreign Direct Investment,"
CEPR Discussion Papers
1659, C.E.P.R. Discussion Papers.
- Blomström, Magnus & Kokko, Ari, 1997. "Regional Integration and Foreign Direct Investment," SSE/EFI Working Paper Series in Economics and Finance 172, Stockholm School of Economics.
- Magnus Blomstrom & Ari Kokko, 1997. "Regional Integration and Foreign Direct Investment," NBER Working Papers 6019, National Bureau of Economic Research, Inc.
- Eduardo Levy Yeyati & Christian Daude & Ernesto Stein, 2003. "Regional Integration and the Location of FDI," Business School Working Papers doce, Universidad Torcuato Di Tella.
- Eduardo Levy Yeyati & Ernesto H. Stein & Christian Daude, 2003. "Regional Integration and the Location of FDI," Research Department Publications 4343, Inter-American Development Bank, Research Department.
- David F. Bradford, 1978. "Tax Neutrality and the Investment Tax Credit," NBER Working Papers 0269, National Bureau of Economic Research, Inc.
- Urata, Shujiro & Kawai, Hiroki, 2000. "The Determinants of the Location of Foreign Direct Investment by Japanese Small and Medium-Sized Enterprises," Small Business Economics, Springer, vol. 15(2), pages 79-103, September.
- Blomstrom, Magnus & Kokko, Ari, 1997. "Regional integration and foreign direct investment : a conceptual framework and three cases," Policy Research Working Paper Series 1750, The World Bank.
- Jürgen von Hagen, 2009. "International Capital Flows and World Output Gains," 2009 Meeting Papers 311, Society for Economic Dynamics.
- Juergen von Hagen & Haiping Zhang, 2010. "International Capital Flows and World Output Gains," Working Papers 01-2010, Singapore Management University, School of Economics.
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