ABSTRACT
In this chapter, we attempt to understand the drivers of Greenfield FDI inflows in the Asian context. In particular, we empirically investigate the importance of infrastructure in determining Greenfield FDI inflows into selected Asian economies, including China and the Association of South East Asian Nations (ASEAN) bloc. Greenfield FDI inflows particularly have facilitated the development of regional production networks and manufacturing supply chains in Asia. While it is well known that these economies have prioritised infrastructural development as a means of developing their manufacturing prowess, to what degree has the quality of physical infrastructure actually influenced FDI inflows coming into the region? Our empirical analysis for a panel of countries including China as well as the ASEAN bloc covering two decades of data from 1995 to 2016 strongly suggest that roads emerge as the most robust determinant of Greenfield FDI inflows.
