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Understanding bilateral FDI flows in developing Asia

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  • Rabin Hattari
  • Ramkishen S. Rajan

Abstract

Unlike trade flows, there has been little to no detailed examination of foreign direct investment (FDI) flows between Asian economies. This paper uses bilateral FDI flows data to investigate trends in intra-Asian FDI flows over the period 1990-2005. It employs an augmented gravity model to identify the main determinants of intra-Asian FDI flows. Possible drivers of FDI flows, including transactional and informational distance (proxied by distance), real sector variables, financial variables and quality of institutions are examined. Copyright © 2009 The Authors. Journal compilation © 2009 Crawford School of Economics and Government, The Australian National University and Blackwell Publishing Asia Pty Ltd..

Suggested Citation

  • Rabin Hattari & Ramkishen S. Rajan, 2009. "Understanding bilateral FDI flows in developing Asia," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 23(2), pages 73-93, November.
    • Handle: RePEc:bla:apacel:v:23:y:2009:i:2:p:73-93
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    1. Irfan Ahmad Khan & Mazhar Mughal & Junaid Ahmed & Hongbo Cai, 2017. "Home and Host country determinants of financial investment flows to Pakistan," Economics Bulletin, AccessEcon, vol. 37(1), pages 361-376.
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    3. Lipsey, Robert E. & Sjöholm, Fredrik, 2011. "South–South FDI and Development in East Asia," Asian Development Review, Asian Development Bank, vol. 28(2), pages 11-31.
    4. Antonakakis, Nikolaos & Tondl, Gabriele, 2012. "Do determinants of FDI to developing countries differ among OECD investors? Insights from Bayesian model averaging," Discussion Papers 1/12, Europa-Kolleg Hamburg, Institute for European Integration.
    5. Bashir Muhammad & Muhammad Kamran Khan, 2023. "Do Institutional Quality and Natural Resources Affect the Outward Foreign Direct Investment of G7 Countries?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(1), pages 116-137, March.
    6. Sasidaran Gopalan & Ramkishen S. Rajan, 2016. "Revisiting Bilateral Foreign Direct Investment Inflows into BRIC Economies," Global Policy, London School of Economics and Political Science, vol. 7(4), pages 510-520, November.
    7. Garrett, Jinzhuo Z., 2016. "Explaining asymmetries in bilateral FDI flows," International Review of Economics & Finance, Elsevier, vol. 41(C), pages 155-171.
    8. Lin Ni & Lei Li & Xin Zhang & Huwei Wen, 2022. "Climate Policy and Foreign Direct Investment: Evidence from a Quasi-Experiment in Chinese Cities," Sustainability, MDPI, vol. 14(24), pages 1-19, December.
    9. Hattari, Rabin & S. Rajan, Ramkishen, 2011. "How Different are FDI and FPI Flows?: Distance and Capital Market Integration," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 26, pages 499-525.
    10. Spyros Arvanitis & Heinz Hollenstein & Tobias Stucki, 2015. "The Characteristics of FDI Activities Located in Different Host Regions – A Study Based on Firm-Level Data," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 151(IV), pages 261-298, December.
    11. Yixing Yang & Md. Qamruzzaman & Mohd Ziaur Rehman & Salma Karim, 2021. "Do Tourism and Institutional Quality Asymmetrically Effects on FDI Sustainability in BIMSTEC Countries: An Application of ARDL, CS-ARDL, NARDL, and Asymmetric Causality Test," Sustainability, MDPI, vol. 13(17), pages 1-29, September.
    12. Sadeghi, Pegah & Shahrestani, Hamid & Kiani, Kambiz Hojabr & Torabi, Taghi, 2020. "Economic complexity, human capital, and FDI attraction: A cross country analysis," International Economics, Elsevier, vol. 164(C), pages 168-182.
    13. repec:unt:escsti:sti84 is not listed on IDEAS
    14. Hasan, Mohd & Masron, tajul, 2011. "Inward FDI from ASEAN and Its Implication on Malaysian Manufacturing Sector," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 45, pages 33-39.
    15. Rabin Hattari & Ramkishen S. Rajan, 2011. "How Different are FDI and FPI Flows?: Does Distance Alter the Composition of Capital Flows?," Working Papers 092011, Hong Kong Institute for Monetary Research.
    16. Pat McAllister & Anupam Nanda, 2016. "Does Real Estate Defy Gravity? An Analysis of Foreign Real Estate Investment Flows," Review of International Economics, Wiley Blackwell, vol. 24(5), pages 924-948, November.
    17. Cavoli, Tony, 2014. "Substitutes or complements? The interactions between components of capital inflows for Asia," Journal of Asian Economics, Elsevier, vol. 31, pages 32-41.
    18. Andaman, Gul & Yusop, Zulkornain & Mohd Noor, Zaleha & Kaliappan, Shivee, 2016. "Host Country-Specific Factors Causing Outwards Foreign Direct Investment from Malaysia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 50(1), pages 67-80.
    19. Nikolaos Antonakakis & Gabriele Tondl, 2015. "Robust determinants of OECD FDI in developing countries: Insights from Bayesian model averaging," Cogent Economics & Finance, Taylor & Francis Journals, vol. 3(1), pages 1095851-109, December.
    20. Metaxas, Theodore & Kechagia, Polyxeni, 2012. "F.D.I. through the imitation procedure The case of China: A Note," MPRA Paper 40886, University Library of Munich, Germany.
    21. Sharvesh Digumber & Hemavadi Soondram & Bhavish Jugurnath, 2017. "Tax Policy and Foreign Direct Investment: Empirical Evidence from Mauritius," International Business Research, Canadian Center of Science and Education, vol. 10(3), pages 42-56, March.
    22. repec:wsr:wpaper:y:2011:i:076 is not listed on IDEAS
    23. Sangyup Choi & Davide Furceri & Chansik Yoon, 2021. "Policy uncertainty and foreign direct investment," Review of International Economics, Wiley Blackwell, vol. 29(2), pages 195-227, May.
    24. Dilip K Das, 2014. "The Role of China in Asia's Evolution to Global Economic Prominence," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 1(1), pages 216-229, January.
    25. Jie Li & Ramkishen S. Rajan & Rabin Hattari, 2016. "Drivers of intraregional M&As within developing Asia," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 21(1), pages 116-131, January.

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