An Analysis of Determinants of Foreign Direct Investment in Banking Industry from Taiwan to ASEAN Countries with Gravity Model

Hsiao-I Pan (), Komsan Suriya and Pathairat Pastpipatkul
Additional contact information
Hsiao-I Pan: Chiang Mai University, under the CMU Presidential Scholarship
Komsan Suriya: Chiang Mai University, under the CMU Presidential Scholarship
Pathairat Pastpipatkul: Chiang Mai University, under the CMU Presidential Scholarship

Asia-Pacific Financial Markets, 2022, vol. 29, issue 4, No 2, 649 pages

Abstract: Abstract This paper examined the choice of FDI location of Taiwanese banks’ FDI with a particular on a sample of the Association of Southeast Asian Nations (ASEAN) member states. The pattern and the determinants of Taiwanese banks’ FDI in ASEAN are investigated with gravity model framework and examined by panel data analysis from 2000 to 2019. It was found that Taiwanese banks generally preferred to directly invest in countries that had large market size, high economic freedom, closer geographical proximity, larger value of bilateral trade, and large amount of Taiwanese outward direct investment. Unlike previous studies, the results confirm that interest rate spread had relatively insignificant effects on the location choice of Taiwanese banks in ASEAN. Additionally, control of corruption in host countries seemed to have significantly negative effect on location choice of Taiwanese banks. The insights presented in this paper could offer useful suggestions for both governments and investors.

Keywords: ASEAN countries; Financial FDI; Gravity model; Internationalization; Location choice; Taiwanese banks; G11; G21 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s10690-022-09363-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:apfinm:v:29:y:2022:i:4:d:10.1007_s10690-022-09363-x

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/10690/PS2

DOI: 10.1007/s10690-022-09363-x

Access Statistics for this article

Asia-Pacific Financial Markets is currently edited by Jiro Akahori

More articles in Asia-Pacific Financial Markets from Springer, Japanese Association of Financial Economics and Engineering
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().