Determinants of intra-FDI flows among ASEAN+3+3 economies

Atif Awad, Ishak Yussof

Research output: Contribution to journalArticle

Abstract

On the basis of the knowledge-capital model of FDI, present study examines the impact current bilateral free trade agreement (FTA) on intra-FDI flow among ASEAN+3+3 countries. We employed extended form of gravity model on data of bilateral FDI flow among these countries during the period 2001–2012. In addition to basic gravity variables, we examined the role of each of the levels of human capital, natural resources, investment incentive policies, exchange rate, labour cost, institutional quality and FTA on intra-FDI flow among these economies. The results showed that low labour cost, availability of natural resources, investment incentive policies, institution quality and the appreciation of host country’s local currency tend to increase intra-FDI flow among these countries. For the factor of interest, the results detected negative impact of FTA on the intra-FDI flow among these countries. This finding, which is consistent with knowledge-capital model of FDI, suggest that it is likely for FTA to increase the economic integration among ASEAN+3+3 economies via improvement in bilateral trade of goods and services and not through bilateral investment.

Original languageEnglish
Pages (from-to)161-181
Number of pages21
JournalGlobal Business and Economics Review
Volume20
Issue number2
DOIs
Publication statusPublished - 1 Jan 2018

Fingerprint

Free trade agreements
Bilateral
Natural resources
Labour costs
Investment incentives
Knowledge capital
Bilateral trade
Factors
Gravity model
Currency
Institutional quality
Human capital
Gravity
Economic integration
Exchange rate policy

Keywords

  • Economic integration
  • FDI
  • Free trade agreement
  • FTA
  • Oreign direct investment

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics

Cite this

Determinants of intra-FDI flows among ASEAN+3+3 economies. / Awad, Atif; Yussof, Ishak.

In: Global Business and Economics Review, Vol. 20, No. 2, 01.01.2018, p. 161-181.

Research output: Contribution to journalArticle

@article{28ca629d4c5f484580ea9520975dcf73,
title = "Determinants of intra-FDI flows among ASEAN+3+3 economies",
abstract = "On the basis of the knowledge-capital model of FDI, present study examines the impact current bilateral free trade agreement (FTA) on intra-FDI flow among ASEAN+3+3 countries. We employed extended form of gravity model on data of bilateral FDI flow among these countries during the period 2001–2012. In addition to basic gravity variables, we examined the role of each of the levels of human capital, natural resources, investment incentive policies, exchange rate, labour cost, institutional quality and FTA on intra-FDI flow among these economies. The results showed that low labour cost, availability of natural resources, investment incentive policies, institution quality and the appreciation of host country’s local currency tend to increase intra-FDI flow among these countries. For the factor of interest, the results detected negative impact of FTA on the intra-FDI flow among these countries. This finding, which is consistent with knowledge-capital model of FDI, suggest that it is likely for FTA to increase the economic integration among ASEAN+3+3 economies via improvement in bilateral trade of goods and services and not through bilateral investment.",
keywords = "Economic integration, FDI, Free trade agreement, FTA, Oreign direct investment",
author = "Atif Awad and Ishak Yussof",
year = "2018",
month = "1",
day = "1",
doi = "10.1504/GBER.2018.090067",
language = "English",
volume = "20",
pages = "161--181",
journal = "Global Business and Economics Review",
issn = "1097-4954",
publisher = "Inderscience Enterprises Ltd",
number = "2",

}

TY - JOUR

T1 - Determinants of intra-FDI flows among ASEAN+3+3 economies

AU - Awad, Atif

AU - Yussof, Ishak

PY - 2018/1/1

Y1 - 2018/1/1

N2 - On the basis of the knowledge-capital model of FDI, present study examines the impact current bilateral free trade agreement (FTA) on intra-FDI flow among ASEAN+3+3 countries. We employed extended form of gravity model on data of bilateral FDI flow among these countries during the period 2001–2012. In addition to basic gravity variables, we examined the role of each of the levels of human capital, natural resources, investment incentive policies, exchange rate, labour cost, institutional quality and FTA on intra-FDI flow among these economies. The results showed that low labour cost, availability of natural resources, investment incentive policies, institution quality and the appreciation of host country’s local currency tend to increase intra-FDI flow among these countries. For the factor of interest, the results detected negative impact of FTA on the intra-FDI flow among these countries. This finding, which is consistent with knowledge-capital model of FDI, suggest that it is likely for FTA to increase the economic integration among ASEAN+3+3 economies via improvement in bilateral trade of goods and services and not through bilateral investment.

AB - On the basis of the knowledge-capital model of FDI, present study examines the impact current bilateral free trade agreement (FTA) on intra-FDI flow among ASEAN+3+3 countries. We employed extended form of gravity model on data of bilateral FDI flow among these countries during the period 2001–2012. In addition to basic gravity variables, we examined the role of each of the levels of human capital, natural resources, investment incentive policies, exchange rate, labour cost, institutional quality and FTA on intra-FDI flow among these economies. The results showed that low labour cost, availability of natural resources, investment incentive policies, institution quality and the appreciation of host country’s local currency tend to increase intra-FDI flow among these countries. For the factor of interest, the results detected negative impact of FTA on the intra-FDI flow among these countries. This finding, which is consistent with knowledge-capital model of FDI, suggest that it is likely for FTA to increase the economic integration among ASEAN+3+3 economies via improvement in bilateral trade of goods and services and not through bilateral investment.

KW - Economic integration

KW - FDI

KW - Free trade agreement

KW - FTA

KW - Oreign direct investment

UR - http://www.scopus.com/inward/record.url?scp=85042871499&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85042871499&partnerID=8YFLogxK

U2 - 10.1504/GBER.2018.090067

DO - 10.1504/GBER.2018.090067

M3 - Article

AN - SCOPUS:85042871499

VL - 20

SP - 161

EP - 181

JO - Global Business and Economics Review

JF - Global Business and Economics Review

SN - 1097-4954

IS - 2

ER -