The Impact of Economic Integration Programs on Inward Foreign Direct Investment

PhD Thesis# 334
Dr. Romdej (R.) Phisalaphong
prof.dr. J.A. Stam, prof.dr. G.A. van der Knaap


In addition to sound and sustainable domestic macro- and micro-economic policies, there are two policies which are widely regarded as strong catalysers for economic development. These policies are regional economic integration and foreign direct investment inducement. With the increasing role of and foreign direct investment inducement and regional economic integration policies, the question over the interaction between the two policies mounted. Does a regional economic integration program undermine or enhance the contributions of inward foreign direct investment? How does an aim to attract more foreign direct investment influence the decision of governments on regional economic integration policies? In some regions such as Southeast Asia, a free trade area (ASEAN Free Trade Area or AFTA) was implemented with an intention to improve the attractiveness of the region for foreign direct investment. Is this rational, or should we expect other kinds of interaction between the two policies? This research study aims to provide an insight into the impact of the regional economic integration on the characteristics and production strategies of foreign direct investment in the region, through a close study of the impact of the Single Market Program and ASEAN market unification on the operations of Japanese multinational companies.

Publisher of the TI-theses is: Rozenberg Publishing Services