The U.S. investment in the ASEAN countries

There is a continuing trend towards worldwide investment regionalism using foreign external investors. This trend is important not only in providing new opportunities for investors, but as the means for productive capacity building of the ASEAN countries by attracting foreign direct investment (FDI). The present paper focuses on the investment experience of the U.S. multinational enterprises (MNE) in the Association of South-East Asian Nations (ASEAN). The study of this issue implies the analysis basic preconditions for growing activities of the U.S. investors and modern features of investment practice of U.S. companies. This scientific analysis is based on publications of foreign specialists, researches and statistical information of leading international organizations and also U.S. Bureau of economic analysis. U.S. direct investment flows in the ASEAN countries made it possible US investors to achieve cost reduction through low remuneration and improve competitiveness, effectively use the complementary advantages of these countries, and expand access to new markets. U.S. investors were able to increase revenues and maximize the benefits from participation in GVCs. U.S. companies have also made a significant contribution to the development of regional value chains in the ASEAN countries. But in recent years, U.S. direct investment began to reduce. This dynamics reflects not only the decline in the importance of the export-oriented model of industrial development, but also the change in the vector of development of the world economy in favor of digital technologies. Recently adopted law The 2017 Tax Cuts and Jobs Act on Components of Direct Investment which stimulates the relocation of companies in the United States also affected

Keywords: The Association of South-East Asian Nations (ASEAN), regional integration, foreign direct investment, cost reduction, advantages of ASEAN, global value chains, multinational enterprises, export-oriented model of industrial development, digital technologies, competitiveness

References

  1. The American Chamber of Commerce in Singapore and the U.S. Chamber of Commerce. ASEAN Business Outlook Survey, 2018. 80 p.
  2. ASEAN Investment Report 2012: Foreign Direct Investment. The Changing FDI Landscape. Jakarta, 2013. 124 p.
  3. ASEAN Investment Report 2016: Foreign Direct Investment and MSME Linkages. Jakarta, 2016. 276 p.
  4. ASEAN Investment Report 2018: Foreign Direct Investment and the Digital Economy in ASEAN.
  5. R. Baldwin. Global supply chains: why they emerged, why they matter, and where they are going/D. Elms and P. Low, eds. Global Value Chains in a Changing World. Geneva, World Trade Organization, 2013. P. 13-59.
  6. Ch. Barshefsky, E. Greenberg, J. Huntsman Jr. Reinvigorating U.S. Economic Strategy in the Asia Pacific. Recommendations for the Incoming Administration. 2017, January. 56 p.
  7. J. Crotty. The Neoliberal Paradox: The Impact of Destructive Product Market Competition and Impatient Finance on Nonfinancial Corporations in the Neoliberal Era//Research Brief. PERY. University of Massachusetts. July, 2003. 7 p.
  8. Joint Media Statement from the ASEAN Economic Ministers-U.S. Trade Representative Consultation. Vientiane, Lao PDR, August 4, 2016. https://ustr.gov/about-us/policy-offices/press-office/pressreleases/2016/august/joint-media-statement-asean-economic.
  9. IMF. World Economic Outlook. October 2018. https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD/SEQ.
  10. C. Lapavitsas, I. Mendieta-Mu oz. The Profits of Financialization// Monthly Review. 2016, July 01. https://monthlyreview.org/2016/07/01/the-profits-of-financialization.
  11. McKinsey & Company. Understanding ASEAN: The manufacturing opportunity. 2014. 12 p.
  12. W. Milberg, X. Jiang, and G. Gereffi. Industrial policy in the era of vertically specialized industrialization//ILO.Transforming Economies. 2014. P. 151-178. https://www.ilo.org/wcmsp5/groups/public/---dgreports/---inst/documents/publication/wcms_315670.pdf.
  13. OECD. Economic Outlook for Southeast Asia, China and India. 2018. P. 239.
  14. OECD investment policy reviews: Southeast Asia. 2018. P. 200.
  15. UNCTAD. Trade and Development Report. 2016. 252 p.
  16. UNCTAD. World Investment Report 2013: Global Value Chains: Investment and Trade for Development. 2013. 264 p.
  17. UNCTAD. World Investment Report 2018: Investment and New Industrial Policies. 2018. 213 p.
  18. Sh. Williams, A. Kliman. Falling profits, rather than increasing financial investment, led to decreasing rates of capital accumulation by American companies. http://blogs. lse.ac.uk/usappblog/2014/10/09/falling-profits-rather-thanincreasing-financial-investment-led-to-decreasing-rates-of-capitalaccumulation-by-american-companies.
  19. A. Yamaguchi. Global Value Chains in ASEAN//Newsletter. No. 1, 2018. 15 p.

Authors