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 language | English |
|---|---|
| Pages (from-to) | 161-181 |
| Number of pages | 21 |
| Journal | Global Business and Economics Review |
| Volume | 20 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 1 Jan 2018 |
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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 journal › Article
}
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
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U2 - 10.1504/GBER.2018.090067
DO - 10.1504/GBER.2018.090067
M3 - Article
VL - 20
SP - 161
EP - 181
JO - Global Business and Economics Review
JF - Global Business and Economics Review
SN - 1097-4954
IS - 2
ER -