FDI, Growth and the Asian Financial Crisis: The Experience of Selected Asian Countries

17 Pages Posted: 26 Oct 2009

See all articles by Shandre M. Thangavelu

Shandre M. Thangavelu

National University of Singapore (NUS) - Department of Economics

Yik Wei Yong

affiliation not provided to SSRN

Aekapol Chongvilaivan

Asian Development Bank

Abstract

This paper studies the trends in foreign direct investment (FDI) flows into selected South-East Asian and East Asian economies after the Asian crisis. Empirical evidence indicates that South-East and East Asian economies are recovering from the Asian crisis with strong output growth driven largely by export growth. However, output growth in the post-crisis period is also accompanied by rising unemployment rates, growing government deficits, and declining FDI inflows into the South-East Asian region. The declining FDI inflows into South-East Asia after the crisis is of concern, as our empirical results show that FDI is important for output growth in the region. Our results also suggest that there might have been structural changes in the regional economies that could have led to a downward shift in the output growth of Asian economies in the post-crisis period. This raises the issue of the sustainability of their output growth in the post-crisis period.

Suggested Citation

Thangavelu, Shandre Mugan and Wei Yong, Yik and Chongvilaivan, Aekapol, FDI, Growth and the Asian Financial Crisis: The Experience of Selected Asian Countries. World Economy, Vol. 32, Issue 10, pp. 1461-1477, October 2009. Available at SSRN: https://ssrn.com/abstract=1492930 or http://dx.doi.org/10.1111/j.1467-9701.2009.01202.x

Shandre Mugan Thangavelu (Contact Author)

National University of Singapore (NUS) - Department of Economics ( email )

1 Arts Link, AS2 #06-02
Singapore 117570, Singapore 119077
Singapore

Yik Wei Yong

affiliation not provided to SSRN

No Address Available

Aekapol Chongvilaivan

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

HOME PAGE: http://www.adb.org/

Register to save articles to
your library

Register

Paper statistics

Downloads
2
Abstract Views
681
PlumX Metrics