Foreign Direct Investment in Southeast Asia: Differential Impacts

✍ Scribed by Maxwell J. Fry

• Publisher: ISEAS Publishing
• Year: 2018
• Tongue: English
• Leaves: 83
• Category: Library

✦ Synopsis

By analysing foreign direct investment (FDI) in a macroeconomic framework, this study throws new light on various channels through which FDI influences saving, investment, growth, and the balance of payments on current account. The finding that FDI has differential impacts in a sample of five Southeast Asian and eleven other developing countries leads to several policy conclusions. First, FDI is attracted for privatization or debt-equity swap programmes, it may provide additional or alternative balance-of-payments support, but will not accelerate capital formation or economic growth. Second, in the presence of financial and trade distortions, FDI can remove from the host country more that it contributes. In other words, it can be immeserizing. Third, the most efficacious way of encouraging FDI is to implement policies that generally improve the investment climate. Where domestically financed investment is booming, FDI will seek to participate. Finally, maximum benefit from FDI can be achieved in open economies that are free of domestic distortions such as financial repression and trade controls.

✦ Table of Contents

Contents
Tables
Figures
Acknowledgements
1. Introduction
2. Global Trends and Foreign Direct Investment Flows to Southeast Asian Developing Economies
3. Does Foreign Direct Investment Provide More Balance-of-Payments Financing?
4. Foreign Direct Investment in a Macroeconomic Model
5. The Empirical Results
6. Conclusion
References
THE AUTHOR