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The Implications Of Emergence Of China Towards Asean-5: Fdi-Gdp Perspective

  • Puah, Chin-Hong
  • Kueh, Jerome Swee-Hui
  • Lau, Evan

The relationship between Foreign Direct Investment (FDI) and Gross Domestic Products (GDP) had become the centre piece of recent researches in identifying the short run and long run implications between the two variables. Using the hypotheses of FDI led GDP and GDP led FDI as theoretical framework, this study intends to analyze the implications of the rise of China towards the ASEAN-5 countries, namely Indonesia, Malaysia, the Philippines, Singapore and Thailand from the perspective of FDI and GDP. The cointegration and vector error correlation estimate test results showed that there is a significant positive long run relationship between FDI of China and GDP of ASEAN-5. However, we failed to detect any short run causal relationship among the variables under study.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 5219.

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Date of creation: 09 Oct 2007
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Handle: RePEc:pra:mprapa:5219
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  16. Florence Jaumotte, 2004. "Foreign Direct Investment and Regional Trade Agreements: The Market Size Effect Revisited," IMF Working Papers 04/206, International Monetary Fund.
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