Analysis of fdi inflows into china from asean-5 countries: A panel cointegration approach

This study analyses the foreign direct investment (fdi) inflows into china from asean–5 countries using the panel cointegration approach. the fdi model has been utilized in determining factors that influence fdi inflows into china from asean–5 countries,namely,malaysia,thailand,the philippines,indonesia and singapore. variables such as trade openness (openness),exchange rate of china relative to each of individual asean–5 countries (relexc),fixed capital formation (fcf),and gross domestic product (gdp) are used for the period of 1990–2004. the empirical results indicate that for most countries openness and gdp are significant variables in explaining the flow of fdi to china. meanwhile,fcf is only significant for malaysia. conversely,relexc is not statistically significant for all countries. it is hoped that this finding can be used by researchers and policy makers in making decision on multilateral relationship between china and asean–5 countries. © 2014,statistical economic and social research and. all rights reserved.