For more than thirty years, Asian countries have known an amazing period of growth, and have now a real and consequent influence on the economic world. However, these countries, like all other developing countries have to face the problem of funding resources in order to develop their economic activity. Indeed, because of their important debts, Asian countries can not turn themselves towards credit operations and the various promises made by different world organizations to help them take time to be realised. Moreover, these potential resources do not represent the same advantages as the Foreign Direct Investments (FDIs) which allow inter-alia technology transfers and procure an easier access to the international market. As a consequence, in a market globalisation context, FDIs have strongly increased since the 90s and are nowadays acting at the heart of the developing countries' economy.
[...] The main motivation for these MNCs for investing in Asian countries is to enhance multinational firm's export competitiveness through the use of cheaper labour market. The export to sales ratio for foreign companies agrees with this phenomenon by standing at more than 60% during the 90s. (UNCTAD,2003) UNCTAD also reported that investment flows to developing Southeast Asia had been directly linked to the creation of export-oriented industries. This has led to rapid growth in the region's manufacturing exports that is to say in Southeast Asian countries. [...]
[...] This refers to net additions to the capital Stock of an economy, including, for example the creation of factories, new machinery, and improved transportation sources. Considered as a private investment, FDI will lead to an increase in total investments and consequently to growth. (Xiaoqin F. and Dickie M., 2004) Moreover, even if it is almost impossible to quantify its impact, FDI leads to growth through indirect channels. Indeed, FDI influences other macro- economics variables as employment, exports, consumption and savings. [...]
[...] Indeed, he links the Southeast' FDIs success with the way that these countries were able to stand these investments: and human capital interact in a complex manner, where FDI inflows create a potential for spillovers of knowledge to the local labor force, at the same time as the host country's level of human capital determines how much FDI it can attract and whether local firms are able to absorb the potential spillovers benefits” To sum up, Blostom argues that FDIs will be relevant in a country only if the latter is able to accept and integrate them, which has been the case for Asian countries, by contrast with some other African countries for example. [...]
[...] Moreover, the different linkages made between multinational and domestic companies has allowed transfers of technologies, and has allowed domestic companies moving to the top by being more competitive internationally. However, FDIs have proved essential for growth in Southeast Asia and will not be relevant without contrasts. Indeed, even if we know that its impact is considerable, it is almost impossible to calculate it in an exhaustive way. Hanson (2001) depicts the impact of FDIs by arguing that investors will invest only in developing countries which know a situation of growth and performing competitiveness. [...]
[...] Indeed, FDIs would lead to short term growth but its impact in the long run would not be representative: impact of the FDI on the growth rate of output is constrained by existence of diminishing returns in the physical capital. Therefore, FDI could only exert a level effect n the output capita, but not a rate effect” (Solow R., 1956) However, in case of Southeast Asian countries, it seems to be quite different, and the increasing evolution of FDIs has been followed by an increasing growth over the last 20 years. [...]
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