Japanese Foreign Direct Investment, Trade and Agricultural Growth in East Asia

Abstract

This paper analyzed the role of Japanese foreign direct investment (FDI) and trade in promoting agricultural growth in East Asian countries over the period 1987–2003. The study employed the panel data econometrics to investigate this relationship empirically. The results indicated that imports, exports and trade liberalization were the important factors that contributed to growth in China, Malaysia, Indonesia, the Philippines, and Thailand. Thus, trade promoting policy in these countries would also stimulate the agricultural growth. By contrast, only imports and trade liberalization were important factors contributing to growth in Korea and Taiwan. The study also found that Japanese FDI significantly helped to stimulate the agricultural growth, but the evidence was weak in the cases of Korea and Taiwan. © 2006, JAPAN SECTION OF THE REGIONAL SCIENCE ASSOCIATION INTERNATIONAL. All rights reserved.