The Impact of Trade Openness on FDI Inflows in

Transcript:The Impact of Trade Openness on FDI Inflows in:
The Impact of Trade Openness on FDI Inflows in Asian Emerging Economies Rathnayaka Mudiyanselage Malsha Mayoshi* Epuran Gheorghe* Faculty of Economics Sciences and Business Administration, Transilvania University of Brasov, Romania *Corresponding authors: rathnayaka.mayoshi@unitbv.ro; epuran.gheorghe@unitbv.ro The 16th International Conference on Business Excellence New Challenges of the Century. Digital Economy and the Green Revolution 1. INTRODUCTION 2. LITERATURE REVIEW 3. RESEARCH GAP, PROBLEM STATEMENT, OBJECTIVE OF THE STUDY, SIGNIFICANCE OF OF THE STUDY 4. MATERIALS AND METHODOLOGY 5. RESULTS AND DISCUSSION 6. CONCLUSION AND POLICY RECOMMENDATION 1. INTRODUCTION The Asian emerging market is considered as one of the prime location for foreign direct investment. Asia is the world’s largest foreign direct investment recipient, hosting more than 30% of global inflows in 2019 (United Nations Conference on Trade and Development (2020). China, Singapore, and Vietnam are considered more FDI-received countries in the Asia-Pacific region (World Bank, 2020). India has received the largest foreign direct investment in South Asia (United Nations Conference on Trade and Development (2020). What is Trade Openness ? The sum of imports and exports normalized by gross domestic product (Kandiero & Chitiga, 2006; Liargovas & Skandalis, 2012; Cantah et al., 2014; Zaman et al., 2018; Rathnayaka Mudiyanselage et al., 2021). The high trade openness ratio indicates that the host country's trade barriers for products and services have been gradually decreased or removed. The impact of trade openness on FDI inflows can be positive, negative or insignificant. 2. LITERATURE REVIEW 3.1 Research Gap No study has used recent data and sophisticated econometric techniques to examine the impact of trade openness, on FDI inflows into Asian emerging economies. 3.2 Problem Statement Many empirical studies have examined the relationship between trade openness and foreign direct investment in single country case studies, cross country analysis in other regions. Example: (Janicki & Wunnava, 2004; Liargovas & Skandalis, 2012; GÜRİŞ & GÖZGÖR, 2015; Gunawardhana & Damayanthi, 2019 and Hintošová, Bruothová, Kubíková, & Ručinský, 2018 and Makoni, 2018; etc.) Is there any long-run and short-run impact of trade openness on FDI inflows in Asian emerging economies for the period from 1996 to 2019? 3.3 Objective of the Study The objective of this study is to identify the impact of trade openness on FDI inflows into Asian emerging economies. 3.4 Significance of the Study Foreign direct investment and trade openness are the main determinants of the economic growth, it is important to get a clear idea about the