Summary: | China has recently embraced globalization in the area of trade and foreign
direct investment (FDI) by joining WTO. Globalization has had positive
results on its economic growth through trade expansion and FDI that opened
new channels for economic expansion. The Fourth Ministerial Meeting of
the WTO in Doha, Qatar approved China's Protocol of Accession. China's
accession to the WTO means a more open China. As a result, China has
transformed itself from one with virtually no foreign-invested firms to the
largest developing-country destination for FDI. Giving the above scenario,
the purpose of this paper is to evaluate the FDI inflows in China from the
selected ASEAN countries using panel data analyses. The FDI model has
been utilized in determining factors that influence FDI inflows into China
from selected ASEAN countries. In panel estimation, two alternative
models, one-way fixed effect model and random effect model were used to
estimate factors affecting the FDI inflows into China. The results of the
study are consistent with the predictions of the previous study particularly
related to trade openness (OPENESS) and relative exchange rate (RELEXC).
We found evidence that OPENESS and RELEXC are an important factor in influencing FDI flows between selected ASEAN countries and China.
|