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FDI Location and Special Economic Zones in the Philippines

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  • Maria Peregrina Makabenta

Abstract

This paper analyzes the location behavior of foreign direct investments (FDIs) in the Philippines from 1987–1998 and points out the role special economic zones (SEZs) and infrastructure play in this location decision. The effects of real income, wages, skills, SEZs, highways and ports on the probability that a manufacturing FDI firm chooses a region are estimated using a negative binomial count model. Results yield expected signs and significant coefficients for all variables except for skills. Regressions were also run for 1987–1992 and 1993–1998 sub†periods to examine structural changes. The stark shift of investments from Metro Manila into other regions during the latter period shows some possible spillover effects of the SEZs as well as infrastructure development carried out in the previous transitional sub†period. Significant marginal effects are highest for paved highways and ports, which strongly indicate that improvement of these two regional factors increase the probability of FDI location.

Suggested Citation

  • Maria Peregrina Makabenta, 2002. "FDI Location and Special Economic Zones in the Philippines," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 14(1), pages 59-77, March.
    • Handle: RePEc:bla:revurb:v:14:y:2002:i:1:p:59-77
    DOI: 10.1111/1467-940X.00048
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    Cited by:

    1. Sina Hardaker, 2020. "Embedded Enclaves? Initial Implications of Development of Special Economic Zones in Myanmar," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(2), pages 404-430, April.
    2. Antra Bhatt & Manas Puri & Andrea Appolloni, 2012. "SEZ Proliferation in India: Are the Objectives Being Realized?," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 19(1), pages 79-88, September.
    3. Ernesto M. Pernia & Janine Elora M. Lazatin, 2016. "Do Regions Gain from an Open Economy?," UP School of Economics Discussion Papers 201602, University of the Philippines School of Economics.
    4. Scott Sanders & David Brown, 2012. "The Migratory Response of Labor to Special Economic Zones in the Philippines, 1995–2005," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 31(1), pages 141-164, February.
    5. Primandita Fitriandi & Makoto Kakinaka & Koji Kotani, 2014. "Foreign direct investment and infrastructure development in Indonesia: Evidence from province level data," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 4(1), pages 79-94, January.
    6. Ayesha KHAN & Hans-Dietrich HAASIS, 2020. "Spatially Induced Effects And Sustainability For Special Economic Zones: Implications For Zones In Pakistan Under China Pakistan Economic Corridor," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(2), pages 179-194, June.

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