Inward FDI of East Asian Countries

Abstract

As foreign direct investment, FDI, takes a great role in economic development, it is necessary to study movements and determinants of inward FDI. This thesis study is then conducted to describe relationships between economic factors and the value-Of inward FDI in 8 East Asian countries, by applying cross-sectional data. Furthermore, the study descriptively analyzes relationships between the value of inward FDI and economic factors, including economic policies, of the countries. The results of the study report that the difference of economic sizes and the difference of labor abundant of the two countries significantly determine the value of inward FDI. In addition, the analysis reports that the value of inward FDI of an East Asian country is positively related to its GDP, Per Capita Income, exports, and the exchange rate. Furthermore, economic environment, investment climate, and policies of the governments highly affect the value of inward FDI of the country. As a result, the study recommends governments to develop their domestic markets, infrastructures, and export competitiveness to become higher competitive destination of inward FDI.