Home Country Determinants of Outward FDI: A Study of Select Asian Economies

27 Pages Posted: 26 Jan 2013

See all articles by Niti Bhasin

Niti Bhasin

University of Delhi - Department of Commerce

Vandana Jain

University of Delhi - Shri Ram College of Commerce

Date Written: January 25, 2013

Abstract

Since the early 1990s, developing countries have seen a rapid growth in their outward investments. The share of South, East and South-East Asia in global outward FDI has substantially increased in the last two decades. Due to the increasing importance of this region in global outward FDI, this paper attempts to examine the home country determinants of outward FDI in ten select economies of the region. With the help of panel data for the period 1991-2010, this paper models the role of home country “push” factors in promoting outward FDI. A fixed effects (Least Squares Dummy Variables (LSDV)) model is developed that captures market conditions, policy variables, economic variables and production factors. We have also used Principal Component Analysis to augment the model’s analytical richness. The results indicate that GDP and FDI openness are important home country factors affecting outward FDI. Countries with high GDP and a more liberal and open FDI policy have larger FDI outflows.

Keywords: Outward FDI, push factors, Asian economies

JEL Classification: F21, F23, O16

Suggested Citation

Bhasin, Niti and Jain, Vandana, Home Country Determinants of Outward FDI: A Study of Select Asian Economies (January 25, 2013). Available at SSRN: https://ssrn.com/abstract=2206739 or http://dx.doi.org/10.2139/ssrn.2206739

Niti Bhasin (Contact Author)

University of Delhi - Department of Commerce ( email )

Department of Commerce, Delhi School of Economics
University of Delhi
Delhi, 110007
India

Vandana Jain

University of Delhi - Shri Ram College of Commerce ( email )

New Delhi
Delhi, Delhi 110007
India

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