| Summary: | 碩士 === 國立高雄應用科技大學 === 國際企業系 === 99 === Free trade area eliminates member countries’ tariff barriers, trade barriers, and reduces the transaction costs of multinational corporations that engage in enhanced FDI activities within the region. Local firms can increase productivity through backward/forward linkage spillover channels. Linkage spillover effects can be provided by MNEs through technical support activities. MNEs may provide technical support activities to improve local firm's productivity; thus, local firms’ productivity increases. In order to determine whether the cross-country spillover effect exists in FDI’s within an FTA region or not, we used panel data consisting of 1049 manufacture firms in the 6 ASEAN member countries: Indonesia, Malaysia, Philippine, Singapore, Thailand, and Vietnam for the period 1999-2009. In the empirical results, we find that cross-country spillover effect exists within regional FDI, but the own FDI spillover effect is insignificant. At the same time, we find that economic freedom also increases the local firms’ productivity significantly.
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