Abstract
Among the Asian regions the East Asia is the largest recipient of foreign direct
investment (FDI). The FDI by affecting the host country’s exports and imports may also
influence the current account balance (CAB) of that country. The East Asian economies
are facing the persistent current account deficit. The current study investigates the impact
of FDI inflows on CAB and on its components (exports and imports) for a panel of
selected East Asian economies. The study employs System Generalized Method of
Moments (Sys GMM) estimation technique on a panel of five countries for the years
2000-2016. FDI is found to have negative effect on current account deficit and positive
effect on exports and imports of the selected economies. It is concluded that by
improving the host country’s exports, FDI inflows can improve CAB in case of East
Asian selected economies
Mahnaz Muhammad Ali, Tusawar Iftikhar Ahmad, Rozina Sadiq. (2019) Empirical Investigation of Foreign Direct Investment and Current Account Balance in East Asian Economies, Pakistan Journal of Commerce and Social Sciences, Volume 13, Issue 3.
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