Is China taking away foreign direct investment from other Asian economies?: An analysis of Japanese, US and Korean FDI

This paper applies the dynamic panel model to investigate whether China is crowding- out FDI from other Asian economies. In addition to an analysis of aggregate FDI like prior studies, an investigation is carried out for FDI from three major investors in the region: Japan, the United States and Korea. It order to deal with possible problems of serial correlation and simultaneous causality bias, refined estimation techniques; namely, Arellano Bond and Instrumental Variable estimations were undertaken. We found that the study on aggregate FDI did not produce any evidence on so called crowding- out of FDI by China, which is consistent with other studies. In FDI source country specific analysis, we did not find any “China effect” on Japanese and Korean FDI. However, the analysis of US FDI found that FDI in China had positive impact on FDI to other Asian economies. These findings led us to conclude that the rise of China could be seen as an opportunity rather than threat in attracting FDI for other Asian economies in the region.China; FDI; crowding- out

Effect of regional integration agreement on foreign direct investment : A theoretical perspective

This paper looked into inter- relationships between Regional Integration Agreement (RIA) and Foreign Direct Investment (FDI) from theoretical point of view. It tried to figure out the conducts of FDI after the formation of RIA from intra- regional and inter- regional perspective. The theoretical framework was developed from the cross- section tabulation of motives and modes of FDI. It is identified that multinationals have two basic rationales for their motives of investment abroad: tariff- jumping and internalization. Further, they conduct their decision of FDI through two modes: vertical and horizontal FDI. To study the distribution of FDI in individual economy after RIA, the study of “Attractiveness matrix” was carried out. It suggested that the flow of FDI depends upon the consequences of “Environmental change” and “Locational advantage” of the host economies within the region.Regional integration, Tariff- jumping, Internalization, Vertical FDI, Horizontal FDI, Environmental change, Locational advantage

Ajia ni okeru kaigai chokusetsu toshi no kettei yoin :

制度:新 ; 報告番号:甲2889号 ; 学位の種類:博士(学術) ; 授与年月日:2009/6/15 ; 早大学位記番号:新511

Effect of regional integration agreement on foreign direct investment : A theoretical perspective

This paper looked into inter- relationships between Regional Integration Agreement (RIA) and Foreign Direct Investment (FDI) from theoretical point of view. It tried to figure out the conducts of FDI after the formation of RIA from intra- regional and inter- regional perspective. The theoretical framework was developed from the cross- section tabulation of motives and modes of FDI. It is identified that multinationals have two basic rationales for their motives of investment abroad: tariff- jumping and internalization. Further, they conduct their decision of FDI through two modes: vertical and horizontal FDI. To study the distribution of FDI in individual economy after RIA, the study of “Attractiveness matrix” was carried out. It suggested that the flow of FDI depends upon the consequences of “Environmental change” and “Locational advantage” of the host economies within the region

Effect of regional integration agreement on foreign direct investment : A theoretical perspective

This paper looked into inter- relationships between Regional Integration Agreement (RIA) and Foreign Direct Investment (FDI) from theoretical point of view. It tried to figure out the conducts of FDI after the formation of RIA from intra- regional and inter- regional perspective. The theoretical framework was developed from the cross- section tabulation of motives and modes of FDI. It is identified that multinationals have two basic rationales for their motives of investment abroad: tariff- jumping and internalization. Further, they conduct their decision of FDI through two modes: vertical and horizontal FDI. To study the distribution of FDI in individual economy after RIA, the study of “Attractiveness matrix” was carried out. It suggested that the flow of FDI depends upon the consequences of “Environmental change” and “Locational advantage” of the host economies within the region

Is China taking away foreign direct investment from other Asian economies?: An analysis of Japanese, US and Korean FDI

This paper applies the dynamic panel model to investigate whether China is crowding- out FDI from other Asian economies. In addition to an analysis of aggregate FDI like prior studies, an investigation is carried out for FDI from three major investors in the region: Japan, the United States and Korea. It order to deal with possible problems of serial correlation and simultaneous causality bias, refined estimation techniques; namely, Arellano Bond and Instrumental Variable estimations were undertaken. We found that the study on aggregate FDI did not produce any evidence on so called crowding- out of FDI by China, which is consistent with other studies. In FDI source country specific analysis, we did not find any “China effect” on Japanese and Korean FDI. However, the analysis of US FDI found that FDI in China had positive impact on FDI to other Asian economies. These findings led us to conclude that the rise of China could be seen as an opportunity rather than threat in attracting FDI for other Asian economies in the region

Loan-to-Value Policy as a Macroprudential Tool: The Case of Residential Mortgage Loans in Asia

Credit creation in the housing market has been a key source of systemic financial risk, and therefore is at the center of the debate on macroprudential policies. The loan-to-value (LTV) ratio is a widely used macroprudential tool aimed at moderating mortgage loan creation, and its effectiveness needs to be estimated empirically. This paper is unique in that it analyzes the effect of LTV on mortgage lending, the direct channel of influence, using a large sample of banks in 10 Asian economies. It uses estimation techniques to deal with the large presence of outliers in the data. Robust-to-outlier estimations show that economies with LTV polices have expanded residential mortgage loans by 6.7% per year, while non-LTV economies have expanded by 14.6%, which suggests LTV policies have been effective

Understanding Foreign Direct Investment in East Asia

We recount East Asia's experience with foreign direct investment (FDI). We document that, contrary to the Rybczynski theorem, capital flows in the region cause the host country's labor-intensive industry to expand and its capital-intensive industry to decline. We also present narrative evidence that sheds light on how FDI is affected by the host's country's locational advantages, whether Asian FDI is footloose, and how the PRC has become the center of Factory Asia. Finally, we show that the evolution of production networks in the region can be explained partly by changes in the service cost of linking geographically separated production blocks relative to the cost saving arising from slicing up the value chain