PUBLICATIONS & REPORTS
PUBLICATIONS & REPORTS
From Kitakyushu to the world: AGI, a research institute that studies Asia's economy and society
The Investment Diversion Effect of Regional Integration with Rules of Origin
| Author | Masaru Umemoto |
|---|---|
| Date of Publication | 2004. 3 |
| No. | 2004-02 |
| Download | 98KB |
Contents Introduction
In this paper I investigate two enquiries related to the investment diversion effect of regional integration. One of the questions is when the investment diversion occurs. And another question is whether we can control the effect well to promote the desirable foreign direct investment. We provide theoretical analysis to answer these issues. This paper shows that the regional integration that formed by the developing countries like ASEAN Free Trade Area may expect the expansion of direct investment from non-member developed countries by rules of origin. Moreover, when the member countries within the integrated region eager to call investment on the industry with superior technology, which needs foreign capital to promote the sector, the rules of origin could be used as a strategic tool.