ROLE OF FDI IN BUILDING CROSS
BORDER LINKAGES IN GMS
Smriti Sharma
UNESCAP
June 3 – August 23, 2013
THE GREATER MEKONG SUBREGION
• Cambodia
• Lao PDR
• Myanmar
• Thailand
• Viet Nam
GARMENTS & TEXTILE:
A GVC APPROACH
GLOBAL VALUE CHAIN
The value chain describes the full range of activities that firms and
workers perform to bring a produc...
FOREIGN DIRECT INVESTMENT
• A long term investment by a non-resident entity
• Exerts substantial management control
• By e...
METHODOLOGY
• 2 databases
 World Investment Report, 2013 (UNCTAD)
 fDi Markets
• Period under study (2003-12)
• FDI– Mer...
FDI INFLOWS - ASEAN
FDI INFLOWS - GMS
SOURCE COUNTRIES OF GFDI IN GMS
ROLE OF INTRA-ASEAN GFDI
FDI INFLOW COMPARISON WITHIN
GMS
GFDI IN GMS
(MANUFACTURING VS. TEXTILES)
JOBS CREATED – 927,094
GFDI IN CAMBODIA
(MANUFACTURING VS. TEXTILES)
JOBS CREATED – 17,701
GFDI IN LAO PDR
(MANUFACTURING VS. TEXTILES)
JOBS CREATED – 13, 247
GFDI IN THAILAND
(MANUFACTURING VS. TEXTILES)
JOBS CREATED – 302, 288
GFDI IN MYANMAR
(MANUFACTURING VS. TEXTILES)
JOBS CREATED – 10, 338
OWNERSHIP STRUCTURE
VIET NAM
GFDI IN VIET NAM
(MANUFACTURING VS. TEXTILES)
JOBS CREATED – 583, 520
POLICY RECOMMENDATIONS
• Garment and Textiles – High employment
generating sector
• FDI will add to the capital of the cou...
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The role of FDI in promoting cross border linkages in the Greater Mekong Subregion

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The role of FDI in promoting cross border linkages in the Greater Mekong Subregion

  1. 1. ROLE OF FDI IN BUILDING CROSS BORDER LINKAGES IN GMS Smriti Sharma UNESCAP June 3 – August 23, 2013
  2. 2. THE GREATER MEKONG SUBREGION • Cambodia • Lao PDR • Myanmar • Thailand • Viet Nam
  3. 3. GARMENTS & TEXTILE: A GVC APPROACH
  4. 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. 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. 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. 7. FDI INFLOWS - ASEAN
  8. 8. FDI INFLOWS - GMS
  9. 9. SOURCE COUNTRIES OF GFDI IN GMS
  10. 10. ROLE OF INTRA-ASEAN GFDI
  11. 11. FDI INFLOW COMPARISON WITHIN GMS
  12. 12. GFDI IN GMS (MANUFACTURING VS. TEXTILES) JOBS CREATED – 927,094
  13. 13. GFDI IN CAMBODIA (MANUFACTURING VS. TEXTILES) JOBS CREATED – 17,701
  14. 14. GFDI IN LAO PDR (MANUFACTURING VS. TEXTILES) JOBS CREATED – 13, 247
  15. 15. GFDI IN THAILAND (MANUFACTURING VS. TEXTILES) JOBS CREATED – 302, 288
  16. 16. GFDI IN MYANMAR (MANUFACTURING VS. TEXTILES) JOBS CREATED – 10, 338
  17. 17. OWNERSHIP STRUCTURE VIET NAM
  18. 18. GFDI IN VIET NAM (MANUFACTURING VS. TEXTILES) JOBS CREATED – 583, 520
  19. 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

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