In this paper we document the growing importance of intra-East Asian trade of parts and components. Our empirical analysis shows that FDI does play an important and independent or exogenous role in facilitating the trade of parts and components in East Asia. This is true for aggregate FDI as well as FDI from individual countries, including investment from the United States, Japan and South Kore...

This paper argues that China’s exchange policy played a critical role in its FDI boom. Yuan’s devaluation and the pegging yuan to the dollar policy not only offset the pressure of rising real wage due to sustained economic growth in the last two decades, but also improved China’s competitiveness in attracting global FDI. Examining the hypothesis in the context of Japanese FDI in China’s nine ma...

Competition for foreign direct investment (FDI) among developing countries has intensified in recent years. Using a sample of 68 developing countries across dif ferent regions, with data from 1975-2005, this paper investigates whether Latin America and the Caribbean (LAC) dif fers from non-LAC regions in regard to determinants of FDI; the evidence suggests that there are dif ferences. In partic...

Double taxation treaties are intended to eliminate double taxation, thereby encouraging FDI, and prevent tax evasion, which previous literature argues will have a negative effect on FDI. Using a segmented data set and matching econometrics, I show that double taxation treaties have no effect on FDI from developed to less developed countries and substantiate why: Developed countries unilaterally...

Much foreign direct investment (FDI) takes the form of mergers and acquisitions (M&A). It is commonplace in finance to view acquisitions as manifestations of the market for corporate control. Following on that insight we propose a model of FDI in which headquarters bid to control overseas assets. We derive an equation for bilateral FDI stocks that resembles the recently developed fixed effects ...

Drawing on recent theoretical explanations, we develop hypotheses on the relationship between business group affiliation and FDI by developing country firms. We hypothesize a positive relationship between business group affiliation and FDI overall, as well as between business group affiliation and FDI into advanced countries and into developing countries. In addition, we argue that the impact o...

Non-traditional source countries of FDI play an increasingly important role, notably in developing host countries. This raises the question of whether the location choices differ systematically between traditional and non-traditional source countries. We perform Logit and Poisson Pseudo Maximum Likelihood estimations to assess the determinants of bilateral FDI flows. We find that economic geogr...

This paper uses the gravity-model approach to deal with two issues related to economic integration. The first concern is to analyse the impact on FDI stocks of specific variables denoting the will to integrate, and their relative impact on exports. Variables considered include tariffs, non-tariff barriers and exchange rate variability. The results show that the widespread opinion – and theoreti...

This paper focuses on the role of interregional technology spillovers in the process of industrial growth in Chinese regions in the period 1990-2005. Inflows of FDI increased rapidly from 1990 till 1998, slowing down thereafter. Domestic R&D investment accelerated after 1998. Regional industrial growth benefits from both interregional R&D spillovers and after 1998 from international FDI spillov...

This paper examines two interrelated aspects of Asian economic dynamism and the management of external shocks, in the context of outward foreign direct investment (FDI) from developing East Asia. Outward FDI from these economies has been growing rapidly, driven by deeper economic integration, more open FDI regimes, growing technological and financial sophistication, and rising savings levels. T...