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Intra‐Asia trade and foreign direct investment
Author(s) -
Kiminami Lily Y.,
Kiminami Akira
Publication year - 1999
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/j.1435-5597.1999.tb00743.x
Subject(s) - foreign direct investment , china , east asia , economics , financial crisis , international trade , wage , international economics , investment (military) , capital (architecture) , capital flows , geography , political science , labour economics , market economy , liberalization , archaeology , politics , law , macroeconomics
. This article reconsiders the patterns of intra‐Asia trade and the linkages with foreign direct investment (FDI) in this region. The following conclusions are drawn. Firstly, by 1985 intra‐Asia trade exhibited both distinct patterns of interindustry trade on the one hand, and intra‐industry trade on the other. Secondly, the patterns of trade in this region have not changed since 1985 from vertical to horizontal, but from a “flying‐geese” to an “acrobatic” type, due to the sharp increase in FDI within the region. Thirdly, since the early 1990s, FDI began to shift to China due to the wage differentials between China and other East Asian countries. This made the countries of East Asia compete with one another, rushing to obtain capital and financial resources from all over the world – ultimately contributing to recent financial and economic turbulence in the region. The article concludes with some brief policy recommendations on how to avoid a recurrence of the Asian crisis in the 21 st century.