FDI attraction policies in ASEAN economies

This book assesses the factors which attract foreign investors to the ASEAN economies, why and how national governments attempt to actively attract FDI and what role the ASEAN Secretariat could play in order to reduce the adverse effects of the competition for FDI among its member states. The econometric study finds that rule-based attraction policies are more effective to attract FDI than incentive-based attraction policies. Country case studies analyze the investment attraction policies of five major ASEAN economies in more analytical depth. It is argued that the competition for FDI has both positive and negative effects for economic development. However, adverse effects are likely to outweigh if the competition for FDI focuses on incentive-based policies. Therefore, the policy recommendations focus on how the ASEAN Secretariat can contribute to overcome the ‘prisoner’s dilemma’ situation of incentive-based competition for FDI attraction within the ASEAN region by improving the coordination and cooperation among the member states in their investment promotion. The analysis should be particularly useful for policymakers and students interested in economic development.