Spatial pattern of Japanese manufacturing foreign direct investment in ASEAN 4 countries

Foreign investment by means of equity participation of foreign firms in local firms contributes to local industrial development through transfer of technology and through leveraging capital requirements. During the last two decades the nature of foreign equity participation in firms and the location of FDI in four ASEAN countries (Indonesia, Thailand, Malaysia, and the Philippines, referred to hereafter as the ASEAN-4 countries) has undergone a significant transition. From 1980-1994, the Japanese manufacturing industry was the major foreign industrial investor in the ASEAN-4 countries. The spatial pattern of equity investment and employment generation has been very different among regions in the ASEAN-4 countries. Using the Theil index we estimate disparity in employment generation and equity investment within and between regions of Indonesia, Thailand, Malaysia, and the Philippines in the context of each country's socio-economic geography and economic development characteristics.