The determinants of bilateral FDI: Is Asia different?

► Intra-Asian foreign direct investment (FDI) is dominated by flows from high technology economies to medium technology economies, while FDI elsewhere primarily consists of flows among high technology economies. ► This distinctive pattern is not due simply to differences in the distribution of Asian FDI recipients by technology, or to systematic differences in Asian technology characteristics. ► Intra-Asian FDI flows systematically favor hosts with relatively low technology achievement and relatively strong intellectual property rights regimes. ► This “Asian exceptionalism” confirms “flying geese” theories that highlight the role of technology flows among economies on nearby rungs of the technology ladder in driving development.