ABSTRACT
The world economy has witnessed a remarkable expansion of foreign direct investment (FDI) since the early 1980s. In the post-World War II period through the 1970s, international trade grew more rapidly than FDI, and thus international trade was by far the most important international economic activity. The situation changed dramatically in the middle of the 1980s, when world FDI started to increase sharply. Indeed, for the period from the early 1980s through the mid-1990s the rate of growth of FDI was significantly higher compared to international trade. Although major investors as well as recipients have been developed countries such as the United States, Western Europe and Japan, developing countries in East Asia, including the NIEs (Hong Kong, Korea, Singapore and Taiwan), ASEAN4 (Indonesia, Malaysia, Philippines, Thailand), and China, have become large recipients of FDI.
