The purpose of this paper is to examine the allocation of the FDI flows in the East Asian region among Southeast Asian countries and China. In addition, it will also investigate the role of the public policy and the private firms during the foreign direct investment process in 1990s. In particular, we will emphasize the Taiwan case, since Taiwan has been one of the main contributors in this reg...

This paper considers a new-product firm’s choice between exporting and foreign direct investment (FDI) to access foreign markets. We find that, when quality is unknown to buyers, the firm may choose FDI over exporting to signal quality, even though FDI is a costlier mode of access than exporting. We then use the model to study the effect of local labor requirement policy imposed by the host cou...

This paper constructs a game-theoretic model to study host country policy to attract import-substituting foreign direct investment (FDI). Investors are assumed to be incompletely informed about local investment conditions, and taxes and tariffs are determined endogenously. We show that in certain situations countries will offer tax incentives while in others they will impose a tariff wall to in...

This paper studies the role of business and social networks in international investment by examining the effects of ethnic Chinese networks on foreign direct investment (FDI) in China. After controlling for a variety of economic determinants of FDI, this study finds a significant positive role in inward FDI of ethnic Chinese networks proxied by the population share of ethnic Chinese in the inve...

During the last decades, the relation between FDI and economic growth has been extensively discussed in the economic literature. Theories and existing literature provide conflicting results concerning this relationship. On one hand, some scholars argue that foreign direct investment could stimulate technological change through the adoption of foreign technology and know-how and technological sp...

Virtually all governments are keen to attract foreign direct investment (FDI). It can generate new jobs, bring in new technologies and, more generally, promote growth and employment. The resulting net increase in domestic income is shared with government through taxation of wages and profits of foreign-owned companies, and possibly other taxes on business (e.g. property tax). FDI may also posit...

This short paper explores the complementarity between foreign aid and foreign direct investment (FDI). Recent studies on aid concluded that aid should come to an end or be reduced with a radical modification of the terms and conditions and FDI and trade should replace aid as the engine of development. In this paper, we argue that aid complements FDI and advances the efficacy of FDI in promoting...

" …the primary determinant of a country's standard of living is how well it succeeds in developing and utilizing the skills, knowledge, health and habits of its population. SUMMARY In recent years, academics and policy-makers have emphasized the role of human capital formation in economic development. By creating human capital, countries become more attractive to private investment, both domest...

On the basis of Dunning’s Investment Development Path (IDP) hypothesis, this paper tests the macroeconomic determinants of Chinese Offshore Direct Investment (ODI) from a home-country perspective. We review the recent firmand country-level studies on determinants of Chinese ODI. We propose a model and test seven home-country macroeconomic variables as determinants of Chinese ODI. Our results re...

In this paper we investigate how strategic aspects in uence the choice between exporting and servicing foreign markets by setting up a plant in the foreign country. We show that tari s on imports in conjunction with the size of the set up costs incurred while setting up plants and the size of the foreign market will determine whether domestic rms which face competition from a foreign rm will ch...