Liberalization and FDI performance: EEvidence from ASEAN and SAFTA member countries

Artikel

The developing and least developed countries in the South and Southeast Asia have emerged as dynamic hosts of foreign direct investment; and inbound FDI growth surpassed that of the developing world during the decade 2001 - 2010. Yet foreign investment continues to flow quite unevenly into individual countries in the region, although majority of the Asian countries do emphasize liberalization unilaterally, bilaterally under the bilateral investment treaty (BIT) and the bilateral trade agreement (BTA), and regionally under the regional trade agreement (RTA). Under such scenarios, this study empirically assesses FDI determinants with a specific focus on the FDI effects of BIT, BTA, and RTA as well as of factors pertaining to institutional quality. Gravity-type econometric results of unbalanced panel data uncover that BIT, BTA, and RTA promote FDI insignificantly. It appears that the role of bilateral instruments in stimulating the inflow of foreign capital diminishes if liberal FDI policies already exist in the host country. Under such circumstances, the quality of the host country's legal and regulatory environment exerts a profound influence on firms' investment decisions. Nonetheless, core gravity variables are found to be important determinants of FDI.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Journal of Economic Structures ; ISSN: 2193-2409 ; Volume: 3 ; Year: 2014 ; Pages: 1-24 ; Heidelberg: Springer

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models ; International Investment; Long-term Capital Movements ; Multinational Firms; International Business
• Subject: FDI ; ASEAN ; SAFTA ; BITs ; BTAs ; Institutional quality

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ullah, Muhammad ; Inaba, Kazuo
• Event: Veröffentlichung
• (who): Springer
• (where): Heidelberg
• (when): 2014

Further information

• DOI: doi:10.1186/s40008-014-0006-z
• Handle: http://hdl.handle.net/10419/147196
• Last update: 10.03.2025, 11:42 AM CET