Regional Integration and Foreign Investment: The Case of Asean Countries

Asian Economic and Financial Review

关键词: Economic integration;    Foreign investment;    Panel data;    Macroeconomic;   

学科分类：社会科学、人文和艺术（综合）

来源: Asian Economic and Social Society

【 摘 要 】

The importance of regional integration in stimulating foreign direct investment cannot be overemphasized. With a special focus on the ASEAN countries, this research paper investigates the role of regional integration in attracting foreign direct investment. We bring a novelty to this paper by dividing foreign direct investment into Inter-and Intra-ASEAN to see if both are determined by the same set of factors. If economic integration drives intra-ASEAN FDI we would expect such FDI to be unrelated to macroeconomic fundamentals in each country, while we would expect Extra-ASEAN FDI to be determined by macroeconomic fundamentals. We employed panel data model in the analyses and the findings show that FDI from rest of the world are determined by macroeconomic fundamentals especially market size (GDP) and exchange rate, while inter-ASEAN FDI is not significantly related to macroeconomic fundamentals but depends on previous investments in the region. This implies most investments in ASEAN from ASEAN are motivated by economic integration.

【 授权许可】

CC BY