Trade Agreements and Transnational Corporations Presence in the Developing Asia

Abstract

This paper investigates the effect of trade agreements on the transnational corporation presence in the developing Asia. This hypothesis is tested on the sample of 9 Asian developing countries for twenty-one years’ time. Evidence is found that the Trade agreements had a significant impact on the FDI received by these Asian countries. Along with trade agreements other conventional FDI location pull factors also play a significant role in the attraction of FDI to the specific region. Through fixed effects panel estimation method, it is found that countries with large market size, educated labour and the low trade barriers are important aspects, which MNC’s consider while making investment in this region.