[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/eab/tradew/23087.html
   My bibliography  Save this paper

Investment and Capital Flows : Implications of the ASEAN Economic Community

Author

Listed:
  • Rafaelita M. Aldaba

    (Philippine Institute for Development Studies)

  • Josef T. Yap
Abstract
One of the objectives of the evolving ASEAN Economic Community (AEC) is to promote free investment flows and freer capital flows. By deepening economic integration among them, ASEAN Member Countries can establish a region-wide production base that will attract more foreign direct investment and strengthen the existing FDI-Trade nexus in East Asia. This will increase the opportunities for domestic firms to participate in regional and global production networks. The principal investment cooperation program of the AEC has been the ASEAN Investment Area which is being expanded to the ASEAN Comprehensive Investment Agreement (ACIA). The chapter delineates measures to make the ACIA more effective, examples of which are adoption of a collective approach and common time frame of trade and investment liberalization; and transferring mode 3 of services (commercial presence) from the ASEAN Framework Agreement on Services to the ACIA. Meanwhile, because of the risks that underlie movement of capital flows, it is recommended that regional financial integration give way to regional financial cooperation. The latter can be an important mechanism to accelerate the development of national financial systems, particularly through a more effective policy dialogue and surveillance process. Since greater global financial integration is a desirable long- term goal, regional financial cooperation can also be geared towards advocating for reform of the international financial architecture and crafting region-wide tools to manage capital flows. These will reduce the risks associated with financial integration. With regard to the issue of optimal sequencing in the process of capital account liberalization, the development of national financial systems remains to be an important component and prerequisite.

Suggested Citation

  • Rafaelita M. Aldaba & Josef T. Yap, 2009. "Investment and Capital Flows : Implications of the ASEAN Economic Community," Trade Working Papers 23087, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:tradew:23087
    as

    Download full text from publisher

    File URL: http://www.eaber.org/node/23087
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Andreas Waldkirch, 2010. "The Effects of Foreign Direct Investment in Mexico since NAFTA," The World Economy, Wiley Blackwell, vol. 33(5), pages 710-745, May.
    2. Guillermo A. Calvo & Leonardo Leiderman & Carmen M. Reinhart, 1994. "The Capital Inflows Problem: Concepts And Issues," Contemporary Economic Policy, Western Economic Association International, vol. 12(3), pages 54-66, July.
    3. Guillermo A. Calvo & Leonardo Leiderman & Carmen M. Reinhart, 1994. "The Capital Inflows Problem: Concepts And Issues," Contemporary Economic Policy, Western Economic Association International, vol. 12(3), pages 54-66, July.
    4. Sid Ahmed Abdelkader, 1993. "Ronald I. McKinnon, The Order of Economic Liberalization : Financial Control in the Transition to a Market Economy," Revue Tiers Monde, Programme National Persée, vol. 34(136), pages 946-946.
    5. Eduardo Levy Yeyati & Christian Daude & Ernesto Stein, 2003. "Regional Integration and the Location of FDI," Business School Working Papers doce, Universidad Torcuato Di Tella.
    6. Eswar S. Prasad & Raghuram G. Rajan, 2008. "A Pragmatic Approach to Capital Account Liberalization," Journal of Economic Perspectives, American Economic Association, vol. 22(3), pages 149-172, Summer.
    7. Julia Kubny & Florian Mölders & Peter Nunnenkamp, 2011. "Regional Integration and FDI in Emerging Markets," Chapters, in: Ulrich Volz (ed.), Regional Integration, Economic Development and Global Governance, chapter 8, Edward Elgar Publishing.
    8. Mitsuyo Ando & Fukunari Kimura, 2005. "The Formation of International Production and Distribution Networks in East Asia," NBER Chapters, in: International Trade in East Asia, pages 177-216, National Bureau of Economic Research, Inc.
    9. Soyoung Kim & Jong-Wha Lee & Kwanho Shin, 2006. "Regional and Global Financial Integration in East Asia," Discussion Paper Series 0602, Institute of Economic Research, Korea University.
    10. Stefano Schiavo, 2008. "Financial Integration, GDP Correlation and the Endogeneity of Optimum Currency Areas," Economica, London School of Economics and Political Science, vol. 75(297), pages 168-189, February.
    11. Paul Burkett & Richard Lotspeich, 1993. "Review Article: Financial Liberalization, Development, and Marketization: A Review of McKinnon's The Order of Economic Liberalization: Financial Control in the Transition to a Market Economy (1991)," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 35(1), pages 59-84, April.
    12. Peter Egger & Michael Pfaffermayr, 2005. "The Determinants of Intrafirm Trade: In Search for Export-Import Magnification Effects," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(4), pages 648-669, December.
    13. Glick,Reuven (ed.), 1998. "Managing Capital Flows and Exchange Rates," Cambridge Books, Cambridge University Press, number 9780521623230, September.
    14. Ray Barrell & Amanda Choy, 2003. "Economic Integration and Openness in Europe and East Asia," National Institute of Economic and Social Research (NIESR) Discussion Papers 214, National Institute of Economic and Social Research.
    15. Haddad, Mona, 2007. "Trade integration in East Asia : the Role of China and production networks," Policy Research Working Paper Series 4160, The World Bank.
    16. Kei-Mu Yi, 2003. "Can Vertical Specialization Explain the Growth of World Trade?," Journal of Political Economy, University of Chicago Press, vol. 111(1), pages 52-102, February.
    17. Medvedev, Denis, 2006. "Beyond trade : the impact of preferential trade agreements on foreign direct investment inflows," Policy Research Working Paper Series 4065, The World Bank.
    18. Takatoshi Ito & Andrew K. Rose, 2005. "International Trade in East Asia," NBER Books, National Bureau of Economic Research, Inc, number ito_05-1.
    19. Alicia Garcia-Herrero & Philip Wooldridge, 2007. "Global and regional financial integration: progress in emerging markets," BIS Quarterly Review, Bank for International Settlements, September.
    20. Ito, Takatoshi & Rose, Andrew K. (ed.), 2005. "International Trade in East Asia," National Bureau of Economic Research Books, University of Chicago Press, number 9780226378961, September.
    21. Shatz, Howard J. & Venables, Anthony J., 2000. "The geography of international investment," Policy Research Working Paper Series 2338, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. THORBECKE William, 2016. "Increasing the Resilience of Asian Supply Chains to Natural Disasters: The Role of the Financial Sector," Working Papers DP-2016-08, Economic Research Institute for ASEAN and East Asia (ERIA).
    2. del Prado, Fatima & Macasaquit, Mari-Len R. & Cabalfin, Michael R. & Mantaring, Melalyn C., 2010. "Development of Regional Production and Logistic Networks in East Asia: the Case of the Philippines," Discussion Papers DP 2010-17, Philippine Institute for Development Studies.
    3. Castillo-Sam, Eva Marie & Tormis, Jeaneth & Murcia, John Vianne, 2016. "A Model of Business Innovation in the Context of Micro, Small and Medium Enterprises in Davao Del Sur," MPRA Paper 72644, University Library of Munich, Germany, revised Jun 2016.
    4. Jayant Menon & Anna Cassandra Melendez, 2017. "Realizing An Asean Economic Community: Progress And Remaining Challenge," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(03), pages 681-702, June.
    5. Aldaba, Rafaelita M., 2013. "Getting Ready for the ASEAN Economic Community 2015: Philippine Investment Liberalization and Facilitation," Discussion Papers DP 2013-03, Philippine Institute for Development Studies.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Philipp Harms & Jaewon Jung & Oliver Lorz, 2021. "Offshoring and sequential production chains: A general equilibrium analysis," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(2), pages 623-647, May.
    2. Laike Yang, 2014. "Production Sharing in East Asia: China’s Position, Trade Pattern and Technology upgrading," Competence Centre on Money, Trade, Finance and Development 1407, Hochschule fuer Technik und Wirtschaft, Berlin.
    3. Dennis J. Snower & Alessio J. G. Brown & Christian Merkl, 2009. "Globalization and the Welfare State: A Review of Hans-Werner Sinn's Can Germany Be Saved?," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 136-158, March.
    4. Richard Baldwin, 2010. "Unilateral Tariff Liberalisation," NBER Working Papers 16600, National Bureau of Economic Research, Inc.
    5. Kose, M. Ayhan & Prasad, Eswar & Rogoff, Kenneth & Wei, Shang-Jin, 2010. "Financial Globalization and Economic Policies," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4283-4359, Elsevier.
    6. Chin Hee Hahn & Yong-Seok Choi, 2010. "China’s Rise and Production and Investment Growth in Korean Manufacturing Industries: Channels and the Effects," Chapters, in: Takatoshi Ito & Chin Hee Hahn (ed.), The Rise of China and Structural Changes in Korea and Asia, chapter 6, Edward Elgar Publishing.
    7. Baldwin, Richard, 2009. "Integration of the North American economy and new-paradigm globalisation," CEPR Discussion Papers 7523, C.E.P.R. Discussion Papers.
    8. Nobuaki Yamashita, 2010. "International Fragmentation of Production," Books, Edward Elgar Publishing, number 13615.
    9. Mitsuyo ANDO, 2010. "Machinery Trade in East Asia, and the Global Financial Crisis," Working Papers DP-2010-10, Economic Research Institute for ASEAN and East Asia (ERIA).
    10. Baldwin, Richard & Venables, Anthony J., 2013. "Spiders and snakes: Offshoring and agglomeration in the global economy," Journal of International Economics, Elsevier, vol. 90(2), pages 245-254.
    11. Baldwin, Richard & Okubo, Toshihiro, 2019. "GVC journeys: Industrialisation and deindustrialisation in the age of the second unbundling," Journal of the Japanese and International Economies, Elsevier, vol. 52(C), pages 53-67.
    12. Mitsuyo Ando & Sven W. Arndt & Fukunari Kimura, 2006. "Production Networks in East Asia : Strategic Behavior by Japanese and U.S. firms," Microeconomics Working Papers 21886, East Asian Bureau of Economic Research.
    13. Daniel Saslavsky & Ben Shepherd, 2014. "Facilitating international production networks: The role of trade logistics," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 23(7), pages 979-999, October.
    14. Hayakawa, Kazunobu, 2009. "Market Access and Intermediate Goods Trade," IDE Discussion Papers 208, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    15. Richard Pomfret, 2011. "Regional Integration in East Asia," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume I, chapter 16, Edward Elgar Publishing.
    16. Mitsuyo Ando, 2011. "International Production/Distribution Networks in East Asia," Chapters, in: Masahisa Fujita & Ikuo Kuroiwa & Satoru Kumagai (ed.), The Economics of East Asian Integration, chapter 4, Edward Elgar Publishing.
    17. Pomfret, Richard & Sourdin, Patricia, 2009. "Have Asian trade agreements reduced trade costs?," Journal of Asian Economics, Elsevier, vol. 20(3), pages 255-268, May.
    18. Qiaomin Li & Sholeh Maani, 2018. "Detecting positive effects of the ASEAN-China free trade agreement on foreign direct investment," International Economics and Economic Policy, Springer, vol. 15(1), pages 69-87, January.
    19. Fukunari Kimura, 2010. "East Asian Production Networks and the Rise of China," Chapters, in: Takatoshi Ito & Chin Hee Hahn (ed.), The Rise of China and Structural Changes in Korea and Asia, chapter 10, Edward Elgar Publishing.
    20. Frankel, Jeffrey, 2010. "Monetary Policy in Emerging Markets," Handbook of Monetary Economics, in: Benjamin M. Friedman & Michael Woodford (ed.), Handbook of Monetary Economics, edition 1, volume 3, chapter 25, pages 1439-1520, Elsevier.

    More about this item

    Keywords

    foreign direct investment; capital flows; ASEAN Economic Community;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eab:tradew:23087. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Shiro Armstrong (email available below). General contact details of provider: https://edirc.repec.org/data/eaberau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.