Are Trade and FDI in ASEAN Substitutes or Complements?: An Application of Spatial Panel Analysis

摘要

The paper aims to study the linkage between foreign direct investment (FDI) and international trade with special attention to the Association of Southeast Asian Nation (ASEAN). We introduce the 2x3x3 Knowledge-Capital model for providing theoretically the trade-complex FDls nexus. Several theoretical implications are proposed, not only the predictions of the substitution of trade and FDI, but also the predictions which complements between trade and FDI. These predictions are then empirically investigated for the U.S. FDI flows to ASEAN countries over the period 1995-2008. Using spatial panel data model we find the fact that the empirical results are consistent with the predictions. Horizontal FDI in ASEAN tends to substitute its import flows, but complements its export flows. Moreover, vertical and export-platform FDI tends to complement both ASEAN's export and import flows.