THE EFFECT OF CHINA'S RISE ON FDI COMPETITION IN EAST ASIA : CROWDING-OUT OR CROWDING-IN?

초록

This paper investigates the China Effect on FDI competition in East Asia: Does China's FDI crowd out or crowd in FDIs in ASEAN countries? Previous research utilized a gravity equation that has no theoretical foundation for FDI flows. This study applies a theory-based Knowledge-Capital Model modified to incorporate preferential market-openings by FTAs and BITs that directly affect investment and trade costs. Using country-pair data for China and ASEAN with 34 OECD home countries during 1985-2010, panel analyses are performed. The results suggest that China's rise does not threaten ASEAN countries but induces a strong synergetic effect on FDIs into them. In attracting FDI inflows, China and ASEAN countries are friends, not foes.

키워드