The Worldwide Shift of FDI to Services- How does it Impact Asia? New Evidence from Seventeen Asian Economies

The productivity spillovers of industry-level FDI on both, the sector of manufacturing and the sector of services, in seventeen South and East Asian economies. Using a dynamic panel GMM methodology, we find significant productivity spillovers by several industry-level FDI: mining FDI and some specific services FDI flows, such as financial services, trade, as well as transport and communications FDI. Services FDI has a two-fold effect on the economy. While having a positive impact on services growth, some services FDI inflows have a negative effect on manufacturing growth. At the same time manufacturing FDI has an impact only on its own sector. [FGKS Research Paper].