Foreign Direct Investment and Trade in the Asia-Pacific Region: Complementarity, Distance and Regional Economic Integration

Abstract

This paper investigates the relationship between F D I and trade in the Asia-Pacific economies by examining the bilateral flows of trade and F D I in a crosssectional study.The estimation results based on the gravity model show a sig nificant and positive relationship between trade and FDI, implying a comple mentary relationship.Estimated coefficients also imply that trade has a larger impact on F D I flows than such investment has on bilateral trade flows.It is evident that the distance between the home country and the host country is a significant resistance factor for trade，but not for FDI.The estimation results

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