The role of FDI in promoting cross border linkages in the Greater Mekong Subregion
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The document analyzes foreign direct investment (FDI) in the textile and garment industry in the Greater Mekong Subregion (GMS) consisting of Cambodia, Lao PDR, Myanmar, Thailand, Vietnam. It finds that FDI has created over 927,000 jobs in the manufacturing and textile sectors in GMS countries from 2003-2012, with the largest number of jobs created in Vietnam at 583,520. It recommends supportive policies to attract more FDI such as reducing regulation and bureaucracy, improving skills to boost absorptive capacity, and reducing costs of services along borders to strengthen cross-border linkages.
The role of FDI in promoting cross border linkages in the Greater Mekong Subregion
- 1. ROLE OF FDI IN BUILDING CROSS BORDER LINKAGES IN GMS Smriti Sharma UNESCAP June 3 August 23, 2013
- 2. THE GREATER MEKONG SUBREGION Cambodia Lao PDR Myanmar Thailand Viet Nam
- 3. GARMENTS & TEXTILE: A GVC APPROACH
- 4. GLOBAL VALUE CHAIN The value chain describes the full range of activities that firms and workers perform to bring a product from its conception to end use and beyond. R&D RAW MATERIAL COMPONENT NETWORK PRODUCTION NETWORK EXPORT MARKETING
- 5. FOREIGN DIRECT INVESTMENT A long term investment by a non-resident entity Exerts substantial management control By either setting up a subsidiary company, acquiring shares (usually 10% or more as specified by OECD) or through the formation of a joint venture or undergoing a merger. (www.investopedia.com)
- 6. METHODOLOGY 2 databases World Investment Report, 2013 (UNCTAD) fDi Markets Period under study (2003-12) FDI Mergers & Acquisitions (Purchase/sale of existing equity) & Greenfield Investments (New investments)
- 7. FDI INFLOWS - ASEAN
- 8. FDI INFLOWS - GMS
- 9. SOURCE COUNTRIES OF GFDI IN GMS
- 10. ROLE OF INTRA-ASEAN GFDI
- 11. FDI INFLOW COMPARISON WITHIN GMS
- 12. GFDI IN GMS (MANUFACTURING VS. TEXTILES) JOBS CREATED 927,094
- 13. GFDI IN CAMBODIA (MANUFACTURING VS. TEXTILES) JOBS CREATED 17,701
- 14. GFDI IN LAO PDR (MANUFACTURING VS. TEXTILES) JOBS CREATED 13, 247
- 15. GFDI IN THAILAND (MANUFACTURING VS. TEXTILES) JOBS CREATED 302, 288
- 16. GFDI IN MYANMAR (MANUFACTURING VS. TEXTILES) JOBS CREATED 10, 338
- 18. GFDI IN VIET NAM (MANUFACTURING VS. TEXTILES) JOBS CREATED 583, 520
- 19. POLICY RECOMMENDATIONS Garment and Textiles High employment generating sector FDI will add to the capital of the countries Required for investment, new technology, research and best practices Supportive policies required reduce regulation, bureaucracy, improve absorptive capacity Border Area Promotion Complementary Factor Endowment Reduce Service Link Costs