Geographic determinants of Australian foreign direct investment

Kishor Sharma, Yapa Bandara

Research output: Book chapter/Published conference paperConference paperpeer-review

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The volume of investment that has flowed from Australia into the outside world, and its implications for economic policy, has attracted substantial policy debate among Australian policy makers, particularly in the context of regionalisation of the world economy. Using hypotheses from investment demand model and new trade theory we investigate if market size, its growth rate, openness, regional economic integration, cultural similarity and the availability of knowledge capital have any impact in attracting Australian investments offshore. Our results suggest that countries which are open, have a large domestic market and stable macro-economic environment tend to attract most Australian FDI. Regional integration, and the similarity in langauge and culture do not have any effect in attracting FDI from Australia. This result has a significant policy implications not only for Australia, but also for other countries who are increasingly engaged in forming trading blocs like Australia-US free trade agreements (AUSFTA).
Original languageEnglish
Title of host publicationTrade and industral development
Subtitle of host publicationContemporary challanges and policies.
EditorsA.S. Jaafar, N A Abdul Karim
Place of PublicationMalaysia
PublisherFaculty of Economic, UUM Kedah
Number of pages16
ISBN (Electronic)9789834372002
Publication statusPublished - 2007
EventInternational Economic Conference on Trade and Industry - Penang, Malaysia, Malaysia
Duration: 03 Dec 200705 Dec 2007


ConferenceInternational Economic Conference on Trade and Industry


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