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Economic Determinants of Inter- and Intra-FDI in East Asia

Author

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  • Hsiang-Chih Hwang

    (Department of Economics, Lingnan University, WYL 302, 8 Castle Peak Road, Tuen Mun, Hong Kong)

  • Jesús Seade

    (Department of Economics, Lingnan University, WYL 302, 8 Castle Peak Road, Tuen Mun, Hong Kong)

Abstract

The authors searched for economic determinants of bilateral foreign direct investment (FDI) in 15 East and Southeast Asian economies between 1990 and 2005. Estimation results from a gravity model using market access, comparative advantage and policy-driven incentives as variables suggest that multinational companies inside and outside the region had dissimilar FDI incentives and concerns regarding relative factor costs, import duties, geographic distance, and language. In addition, the results suggest a positive relationship between increased regional trade and FDI in East and Southeast Asia.

Suggested Citation

  • Hsiang-Chih Hwang & Jesús Seade, 2013. "Economic Determinants of Inter- and Intra-FDI in East Asia," China Economic Policy Review (CEPR), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 1-13.
    • Handle: RePEc:wsi:ceprxx:v:02:y:2013:i:02:n:s1793969013500088
    DOI: 10.1142/S1793969013500088
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    References listed on IDEAS

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    1. Nathalie AMINIAN & K. C. FUNG & IIZAKA Hitomi, 2007. "Foreign Direct Investment, Intra-Regional Trade and Production Sharing in East Asia," Discussion papers 07064, Research Institute of Economy, Trade and Industry (RIETI).
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    5. N/A, 2006. "The World Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 198(1), pages 10-35, October.
    6. Athukorala, Prema-chandra & Kohpaiboon, Archanun, 2009. "Intra-Regional Trade in East Asia: The Decoupling Fallacy, Crisis, and Policy Challenges," ADBI Working Papers 177, Asian Development Bank Institute.
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