Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/161473 
Year of Publication: 
2016
Series/Report no.: 
ADBI Working Paper No. 597
Publisher: 
Asian Development Bank Institute (ADBI), Tokyo
Abstract: 
Forging closer economic relations between the People's Republic of China (PRC) and the Association of Southeast Asian Nations (ASEAN) over the last 2 decades has contributed to building a stronger ASEAN economy. It is particularly important to know how the PRC's foreign direct investment responds to ASEAN's economic performance. This study investigates the causal relationship between the PRC's foreign direct investment and economic growth among the 10 ASEAN member countries from 1995 to 2013. Panel unit root tests, a spatial panel vector autoregressive model, and spatial Granger causality are employed as empirical techniques for spatial panel estimation. The empirical results reveal that the PRC's direct investment in ASEAN caused economic growth in ASEAN, and economic growth in ASEAN resulted in the PRC's direct investment in ASEAN. This finding raises potentially interesting external investment policy implications.
Subjects: 
foreign direct investment
direct investment
investment
the People's Republic of China
Association of Southeast Asian Nations
economic growth
JEL: 
O47
F23
C33
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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