The FDI-GDP Nexus for Selected Asian Countries : The Role of Asymmetry

The foremost contribution of this paper is to explicitly consider the role of asymmetry in studying the nexus between FDI shocks and real GDP across seven selected countries of Asia. To accomplish this contribution, the nonlinear autoregressive distributed lag (NARDL) and generalized impulse response function (GIRF) methodologies are employed. The NARDL model reveals that FDI asymmetrically affects real GDP in five Asian economies: Indonesia, Malaysia, Philippines, Singapore, and Thailand in the long run, meanwhile short-run asymmetry is confirmed for Malaysia, Thailand, and Japan. The GIRF shows that the responses of the sample countries' to the positive and negative shocks do not seem to be as mirror images of one another. It is believed that these findings have thoughtful implications for policy analysis and empirical modeling