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Regional Investment Pioneers in South Asia : The Payoff of Knowing Your Neighbors (English)

Regional economic engagement within South Asia may gain increasing importance owing to several factors that are currently in play, including strategies to diversify global value chains and locate such value chains nearer home. These developments offer South Asia a chance to enhance its low levels of regional economic engagement and capitalize on significant unrealized development opportunities. This report shows that examining intraregional investment and knowledge connectivity enhances our understanding of the low levels of intraregional trade and limited regional value chains in South Asia. Creating a new and unique data set for South Asian investment, it provides a detailed and nuanced understanding of the drivers of outward investment, both regional and global, for South Asian firms. This report provides key considerations for policy makers in South Asia, which remain particularly relevant in the aftermath of the pandemic. First, it makes a case for regulatory relaxation of outward FDI regimes, based on new micro foundations, grounded in value chains. Second, it spells out details of smart inward FDI promotion techniques and investment facilitation. Third, it identifies distinct cross-border information-enhancing and network development activities. Fourth, it suggests that digital connectivity and continued interventions in reducing trade costs are warranted to increase investment as well as trade flows. There is particular scope to build on the digitalization initiatives in trade and investment facilitation taken during the pandemic.


  • Author

    Kathuria,Sanjay, Yatawara,Ravindra A., Zhu,Xiao’ou

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  • Country

    South Asia,

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    South Asia,

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  • Doc Name

    Regional Investment Pioneers in South Asia : The Payoff of Knowing Your Neighbors

  • Keywords

    inward foreign direct investment; Political Economy of Trade; home country; home countries; global gross domestic product; value chain; regional value chain; trade and investment; entry cost; global value chain; special economic zone; share of woman; sustainable development policy; determinants of investment; free trade agreement; implications for policy; access to finance; automotive value chain; living in poverty; chambers of commerce; Connectivity and Trade; foreign investment flow; bilateral investment treaty; initial capital cost; higher profit margin; growth and development; state-owned enterprise; changing consumer preferences; international trade policy; trade and poverty; privileges and immunity; acquisition of knowledge; lack of knowledge; balance of payment; quality of information; investment in transportation; welfare of consumers; Type of Investment; direct investment policy; regional economic integration; intraregional trade; trade costs; sunk cost; regional investment; investment arrangements; digital connectivity; consumer market; in economics; investment opportunities; high share; information barriers; export platform; global standard; firm-level survey; international engagement; income economy; hotel industry; middle-income economy; survey instrument; Land Ownership; survey data; trade friction; intellectual property; across border; market failure; nontariff measure; distribution investment; Investment Type; global recession; crisis situation; investment agreement; low-income economy; economic model; regional spillover; investment fund; alternative mode; goods export; geographic region; domestic output; low share; firm level; data availability; small country; air transport; impact investment; remedial action; emerging economy; Emerging economies; double taxation; advanced economy; remittance scheme; trade responses; goods trade; tariff preference; Industrial Policy; global recovery; world trade; investment environment; average score; Job Creation; rising demand; comparative advantage; partner country; middle class; business intelligence; global stock; dissemination process; international strategies; trade tensions; supply chain; trade protection; global economy; field assignments; public health; Global Engagement; empirical analysis; high entry; study including; faculty position; several reasons; Industrial Policies; air travel; energy crisis; global companies; global development; Civil War; recent research; global investor; new idea; risk averse; public policy; regional network; global travel; policy uncertainty; web portal; apparel manufacturers; steel industry; promotion policy; business practice; national reform; industry association; Single Window; small economy; empirical result; medicinal products; commercial purpose; health security; government regulation; Trade Policies; empirical estimation; random sample; landlocked economies; trade flow; regional economy; firm survey; land border; original work; high tariff; sole responsibility; common land; copyright owner; approval process; government approval; low volume; vibrant democracy; aging society; host economy; production cost; franchise agreement; trading partner; sales development; positive impact; international business; network development; global trend; network connection; food product; travel agency; financial service; retail trade; network connectivity; investment account; Equity Finance; collected data; market opportunity; historical perspective; health benefit; land cost; internationalization strategy



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Kathuria,Sanjay Yatawara,Ravindra A. Zhu,Xiao’ou

Regional Investment Pioneers in South Asia : The Payoff of Knowing Your Neighbors (English). South Asia Development Forum Washington, D.C. : World Bank Group.