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2000•Journal of Economic IntegrationOpen access

Foreign Direct Investment and Trade in the Asia-Pacific Region: Complementarity, Distance and Regional Economic Integration

Susan Stone, Bang Nam Jeon

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Abstract

This paper investigates the relationship between F D I and trade in the Asia-Pacific economies by examining the bilateral flows of trade and F D I in a crosssectional study.The estimation results based on the gravity model show a sig nificant and positive relationship between trade and FDI, implying a comple mentary relationship.Estimated coefficients also imply that trade has a larger impact on F D I flows than such investment has on bilateral trade flows.It is evident that the distance between the home country and the host country is a significant resistance factor for trade，but not for FDI.The estimation results

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What this paper is about

This paper investigates the relationship between F D I and trade in the Asia-Pacific economies by examining the bilateral flows of trade and F D I in a crosssectional study.The estimation results based on the gravity model show a sig nificant and positive relationship between trade and FDI, implying a comple mentary relationship.Estimated coefficients also imply that trade has a larger impact on F D I flows than such investment has on bilateral trade flows.It is evident that the distance between the home country and the host country is a significant resistance factor for trade，but not for FDI.The estimation results

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Available abstract

This paper investigates the relationship between F D I and trade in the Asia-Pacific economies by examining the bilateral flows of trade and F D I in a crosssectional study.The estimation results based on the gravity model show a sig nificant and positive relationship between trade and FDI, implying a comple mentary relationship.Estimated coefficients also imply that trade has a larger impact on F D I flows than such investment has on bilateral trade flows.It is evident that the distance between the home country and the host country is a significant resistance factor for trade，but not for FDI.The estimation results

Key concepts: Complementarity (molecular biology), Foreign direct investment, Gravity model of trade, Bilateral trade, Economics, Economic integration, International economics, Estimation

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