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Determinants of Foreign Direct Investment: A study of Singapore and Hong Kong.
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.
2016 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

FDI has played a critical role in helping Asian economies achieve rapid economicdevelopment as more countries begin to open their economies. Although, there are manyresearches done on FDI in the developing Asian economies, few studies focuses ondeveloped Asian countries such as Hong Kong and Singapore. Hence, the objectives of thisthesis are to study the significance and the similarities and differences of the determinantsthat could possibly drive these high levels of inward FDI in Singapore and its closecompetitor, Hong Kong. The study will also examine the significance of the growth rates ofthese determinants in relation to the growth of FDI inflow into both countries.

The determinants that are examined are exchange rate, market size, inflation rate,infrastructure and trade openness together with a dummy variable to account for the impactof Hong Kong’s return to China. The determinants are examined at level with a time trendand at growth. Data is collected over the period of 1975-2014 for Singapore and 1980-2014for Hong Kong. Using the Ordinary Least Square regression (OLS) at level with a time trendincluded, we found that market size and trade openness have a significant impact on FDIinflow into Singapore while in the case of Hong Kong, none of the determinants showed highlevel of significance in attracting FDI inflow. However, for the OLS regression on the growthrates, only Singapore displayed significance for the determinant of trade openness, whileHong Kong did not show any significance on the selected determinants. Based on the results,all variables displayed the expected relationship with FDI, except for the determinant ofinfrastructure (at level) for Hong Kong.

Place, publisher, year, edition, pages
2016.
Keyword [en]
FDI, determinants of FDI, Singapore, Hong Kong.
National Category
Economics
Identifiers
URN: urn:nbn:se:umu:diva-130299OAI: oai:DiVA.org:umu-130299DiVA: diva2:1065705
Available from: 2017-01-16 Created: 2017-01-16

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CiteExportLink to record
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Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
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Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf