Publication

This paper investigates trends, patterns and drivers of intra-Asian foreign direct investment (FDI) flows by analyzing bilateral FDI flows involving 14 emerging Asian countries for the period 1990 to 2005. The data indicates that about 35 percent of FDI flows to emerging Asia between 1990 and 2005 have come from within the region. The paper finds that an augmented gravity model fits the data fairly well. As in the case of international trade, distance stands out as an important determinant of bilateral FDI flows, suggesting that transport costs and informational asymmetries are factors that could hinder intra-Asian FDI flows.