Abstract
With almost 30 per cent of the global foreign direct investment (FDI) inflows channeled to Asia the region is world leading in attracting FDI. Yet, on a sub-regional level South Asia is the weakest region among all Asian sub-regions. This gives raise to the question what separates South Asian countries from their more successful East and South East neighbouring countries.
The general question why certain countries manage to attract FDI while others fail has been frequently addressed in literature. Moreover, research in logistics and transportation claims on a host of determinants that explains the location considerations of MNEs based on host country logistic performance. By implementing these determinants into more traditional FDI and trade models our objective is to shed more light on the importance of the individual aspects of national transportation systems on the FDI and trade patterns in the Asian region. Moreover, we provide theoretical arguments and empirical evidence that national transportation systems moderate the effects of the different dimensions of (between-) country distance on international trade and FDI performance.
Our findings show that the elements of national transportation systems positively influence both trade and FDI. Additionally, more developed national transportation systems are able to overcome the costs of distance to some degree. We also find support for the notion that the nature of the costs of geographic distance (e.g. transportation costs) differ between trade and FDI. While the former is related to international transportation and port infrastructure, the latter is based on within-country transportation and is moderated by land-based transportation infrastructure.
The general question why certain countries manage to attract FDI while others fail has been frequently addressed in literature. Moreover, research in logistics and transportation claims on a host of determinants that explains the location considerations of MNEs based on host country logistic performance. By implementing these determinants into more traditional FDI and trade models our objective is to shed more light on the importance of the individual aspects of national transportation systems on the FDI and trade patterns in the Asian region. Moreover, we provide theoretical arguments and empirical evidence that national transportation systems moderate the effects of the different dimensions of (between-) country distance on international trade and FDI performance.
Our findings show that the elements of national transportation systems positively influence both trade and FDI. Additionally, more developed national transportation systems are able to overcome the costs of distance to some degree. We also find support for the notion that the nature of the costs of geographic distance (e.g. transportation costs) differ between trade and FDI. While the former is related to international transportation and port infrastructure, the latter is based on within-country transportation and is moderated by land-based transportation infrastructure.
Originalsprog | Engelsk |
---|---|
Tidsskrift | Transport Policy |
Vol/bind | 98 |
Sider (fra-til) | 35-47 |
Antal sider | 13 |
ISSN | 0967-070X |
DOI | |
Status | Udgivet - nov. 2020 |
Bibliografisk note
Published online: 4 September 2018Emneord
- Transportation systems
- Logistics performance
- Global value chains
- FDI
- International trade
- Costs of distance
- Gravity model