A novel study on OFDI and home country exports: implications for the ASEAN region

Fayyaz Ahmad, Muhammad Umar Draz and Su-Chang Yang

Journal of Chinese Economic and Foreign Trade Studies, 2016, vol. 9, issue 2, 131-145

Abstract: Purpose - This study aims to examine the effects of outward foreign direct investment (OFDI) on the home country exports for selected ASEAN countries during 1981-2013. Design/methodology/approach - The authors have used OLS regression based on the unit root analysis, correlation technique and a series of specification tests applied to annual time series data. Findings - The results reveal that the complementary effects of OFDI on exports of the home country outweigh the substitution effects for four ASEAN countries. Furthermore, trade openness, currency fluctuations and inward foreign direct investment (FDI) are also important factors for progressive home country exports. Originality/value - This study provides a thorough analysis of the links between OFDI and exports of the home country on a macro level. With a data set of more than three decades from the ASEAN region, this study is the first attempt of its kind to analyze the relationship of these two variables on the aggregate level.

Keywords: ASEAN; OFDI; Home country exports; Trade openness (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jcefts:v:9:y:2016:i:2:p:131-145

DOI: 10.1108/JCEFTS-06-2016-0016

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