Asian Investment in Australian Capital City Property Markets

Foreign investment as alternative funding in accelerating economic growth and development increases the climate of competition between countries in attracting investment flows. This study aims to determine the effect of corporate income tax rates and macroeconomic indicators on foreign direct investment (FDI) inflows to ASEAN member countries during the period 2013 to 2019. Using data sourced from publications of The World Bank, OECD, and KPMG, this paper used the panel data regression method. Using the Random Effects Model, this study shows that there is no statistically significant relationship between corporate income tax rates and FDI inflows in ASEAN member countries. Variables that have a significant influence on FDI inflows are macroeconomic indicators in the form of the market size (GDP), trade openness, and inflation rate. So that the results of this study can be used as a consideration in policy making in ASEAN, especially in increasing domestic investment inflows.

Research aims: This paper aims to examine factors influencing China's outward foreign direct investment (FDI) in ASEAN economies.Design/Methodology/Approach: The Kao panel cointegration approach and the Panel ARDL model were used in this study to estimate the long-run and short-run relationship between variables. This method is deemed superior to other panel models since it is advantageous when dealing with non-stationary variables at the level or I(1).Research findings: The estimation results provide empirical evidence that in the long run, ASEAN market size, exchange rate, import and export levels between China and ASEAN countries, inflation rate, and institutional factors such as the index of corruption control and political stability are the primary determinants of the flow of outward foreign direct investments from China to ASEAN economies. Theoretical contribution/Originality: This study provides additional evidence regarding the factors influencing direct investment flow from the home country to the host country, known as an outward foreign direct investment (OFDI). Previous studies have robustly proven that OFDI flows are influenced by factors such as the resources and market size of the host country, as predicted by location theory. This study further provides evidence that host country trade policy, the level of competitiveness demonstrated by favorable exchange rates, and institutional factors like corruption control and political stability are other important determinants in the context of China’s OFDI in ASEAN countries.Practitioner/Policy implication: Maintaining open trade policy, a competitive exchange rate and significant improvement in law and order would be suitable policies for ASEAN economies to attract more investment from China and other countries.Research limitation/Implication: This study did not cover other variables, such as investment facilities provided by the host government. In addition, economic packages like tax holidays and import-tariff discounts are common policies ASEAN countries provide. Hence, this variable can be considered in future research.

The article analyzes the factors affecting China’s investment attractiveness, the features of creating a favorable investment climate in China, and investigates new trends of FDI in China. The article highlights the main directions of attracting foreign direct investment in the Chinese economy. The paper aims to systematize the theoretical aspects of the state’s investment attractiveness and analyze the investment attractiveness of the Chinese economy at the present stage of development. The purpose of the article is to determine the PRC’s contribution to global sustainable development, taking into account the fact that the PRC is strengthening its position in the world arena due to the inflow of foreign investments. The article initially examines the role of foreign direct investment in the development of the state’s economy. Each country has a specific approach to attracting foreign investment, which is predetermined by the level of socio-economic development, the degree of external openness, and the established objectives. Therefore, the first stage of the research was an analysis of investment inflows and outflows. Changes that took place due to the implementation of the “open door” policy were considered. Then the advantages and disadvantages of China’s policies aimed at stimulating foreign investment were analyzed in detail. We studied the state and dynamics of investment processes in the PRC, examined the specifics of the regional and sectoral structure of foreign investment in China, evaluated the economic essence and classification of foreign investment, forms and methods of state regulation of foreign investment, as well as some aspects of the legal regulation of investment activity in China. We have systematized the main advantages and risks of the PRC investment climate. It was found that, despite the significant investment attractiveness of China, there are many investment risks. Still, the Chinese government continues reforms aimed at improving the investment climate of the state. A review of China’s position in the ratings of investment attractiveness, such as the Ease of doing the business score, the Global Competitiveness Index, and the Global Sustainable Competitiveness Index was carried out. It was made an intermediate conclusion that foreign capital is increasingly rushing to developing countries, especially to the dynamically developing economies of the BRIC countries, the undisputed leader in attracting foreign investment among which is China. The work results give every reason to predict the growth of foreign investment in the PRC’s economy since the country is characterized by stable and positively dynamic development. It is also assumed that the inflow of investments into the PRC’s economy is reciprocal since China is smoothly turning from a recipient of investments into an investor ready to contribute to global sustainable development.

On 30 March 2010, in the wake of a close general election and the aftermath of the Global Financial Crisis, Malaysian Prime Minister Najib Abdul Razak announced a New Economic Model (NEM) for the country. A country that had once boasted average annual economic growth rates of 8 per cent between 1990 and 1997, had been listed as one of the few countries to post an average 7 per cent growth rate over a 25-year period, and confidently announced aspirations of achieving high-income status by 2020, was slowing down and grinding to a halt. Post-1997, annual economic growth had halved, investment as a proportion of GDP dropped precipitously and the country was leaking foreign direct investment (FDI) to its regional competitors. Although absolute poverty had been practically eradicated, Malaysia was now stuck in a 'middle income trap,' with most Malaysians still occupying low-skilled jobs, 40 per cent earning less than US$15 per day and 350,000 of Malaysia's most educated preferring to work and live overseas.

factors such as level of output, rate of saving and investment, standard of living of people, per capita income as well as national income and finally on industrial development. Pakistan is the second largest economy in the south Asia in terms of market size and availability of cheap labor force, however, failed to attract the surge of FDI inflow in the economy during last two decades. More specifically, the foreign investment comes in Pakistan generally on the basis of relation i.e. Pak -US relationship whose effect can be observed clearly during interval 2000 to 2007. Later, the financial crisis dumped the world economy resultant the developed countries channelize their investment within country to cope up with the worsening effect of financial crisis rather than concentrating on foreign investment. The prime motto behind this study is to observe the challenging effect of FDI inflow on the economy of Pakistan during most impressive period in Pakistan history in terms of foreign investment. In this study the economic growth of Pakistan is being measured by developing the econometric model over various indicators such as GDP, GDPPC, GNI, TOP during clustering period 2000 to 2012.Empirical results shows that the entrance of FDI, however, uplifted the status of GDP whereas another variables are negatively influenced during first interval i,e.2000 to 2006. On the other hand, during second interval of study i.e. 2007 to 2012 the entrance of FDI inflow strongly affected the status of GDP Per Capita, whereas other variables are negatively influenced. At last, despite of favorable investment environment and key macroeconomic fundamentals, the Pakistan is still legging continuously in attacking the large FDI inflow caused to poor infrastructure, terrorist activities, energy issues, distortion in law and orders and large security issues.

ASEAN as a region has a great economic potential, which explains the large interest in terms of investment in the region. The ASEAN Economic Community (AEC) cooperation program is also a milestone in increasing foreign investment in ASEAN. This study uses a quantitative approach, with the subject of this research being 10 ASEAN countries in 2015–2021. The dependent variable used in this study is foreign direct investment, and the independent variables are government effectiveness, political stability, trade openness, and the workforce. The data in this study comes from the world bank. The analytical method applied in this study is the panel data regression analysis method. Based on the research results, it can be concluded that trade openness and labor force had a positive and significant impact on foreign direct investment in 10 ASEAN countries in 2015–2021. At the same time, government effectiveness and political stability had a positive but insignificant effect. The results of simultaneous testing show that government effectiveness, political stability, trade openness, and the workforce influenced foreign direct investment in 10 ASEAN countries in 2015–2021. The government can use this study in determining foreign investment policies, especially those related to maintaining a stable investment climate. Keywords: ASEAN, foreign direct investment, government effectiveness, labor force, political stability, trade openness

The adoption of IFRS enhanced the transparency of stewardship reporting and thus improved the investment ability of countries affected. The study examined the moderating effect of institutional quality on the relationship between international financial reporting standards and foreign direct investment in Nigeria from 2012 to 2018 Institutional quality was measured by political stability and control of corruption while foreign direct investment was measured by foreign investment on equity, foreign portfolio investment on money market and foreign direct investment on trade credits. Ex-post facto research design was adopted and the Generalised Methods of Moments (GMM) was used for the analysis. The study found that with the aid of institutional quality, the IFRS has a significant effect on investment inflows in Nigeria. The study concludes that international financial reporting standards has a significant influence on foreign direct investment with strengthened institution and anticorruption efforts in Nigeria. Therefore, the study recommends that the Nigerian government should strengthen its institutional mechanisms to fully benefit from the adoption of IFRS and drive inflows of foreign direct investment.

Purpose– Investment in Australia’s property market, whether directly or indirectly through Australian real estate investment trusts (A-REITs), grew remarkably since the 1990s. The degree of segregation between the property market and other financial assets, such as shares and bonds, can influence the diversification benefits within multi-asset portfolios. This raises the question of whether direct and indirect property investments are substitutable. Establishing how information transmits between asset classes and impacts the predictability of returns is of interest to investors. The paper aims to discuss these issues.Design/methodology/approach– The authors study the linkages between direct and indirect Australian property sectors from 1985 to 2013, with shares and bonds. This paper employs an Autoregressive Fractionally Integrated Moving Average (ARFIMA) process to de-smooth a valuation-based direct property index. The authors establish directional lead-lag relationships between markets using bi-variate Granger causality tests. Johansen cointegration tests are carried out to examine how direct and indirect property markets adjust to an equilibrium long-term relationship and short-term deviations from such a relationship with other asset classes.Findings– The authors find the use of appraisal-based property data creates a smoothing bias which masks the extent of how information is transmitted between the indirect property sector, stock and bond markets, and influences returns. The authors demonstrate that an ARFIMA process accounting for a smoothing bias up to lags of four quarters can overcome the overstatement of the smoothing bias from traditional AR models, after individually appraised constituent properties are aggregated into an overall index. The results show that direct property adjusts to information transmitted from market-traded A-REITs and stocks.Practical implications– The study shows direct property investments and A-REITs are substitutible in a multi-asset portfolio in the long and short term.Originality/value– The authors apply an ARFIMA(p,d,q) model to de-smooth Australian property returns, as proposed by Bond and Hwang (2007). The authors expect the findings will contribute to the discussion on whether direct property and REITs are substitutes in a multi-asset portfolio.

This paper explores the relationship between the Australian real estate and equity market between 1980 and 1999. The results from this study show three specific outcomes that extend the current literature on real estate finance. First, it is shown that structural shifts in stock and property markets can lead to the emergence of an unstable linear relationship between these markets. That is, full‐sample results support bi‐directional Granger causality between equity and real estate returns, whereas when sub‐samples are chosen that account for structural shifts the results generally show that changes within stock market prices influence real estate market returns, but not vice versa. Second, the results also indicate that non‐linear causality tests show a strong unidirectional relationship running from the stock market to the real estate market. Finally, from this empirical evidence a trading strategy is developed which offers superior performance when compared to adopting a passive strategy for investing in Australian securitized property. These results appear to have important implications for managing property assets in the funds management industry and also for the pricing efficiency within the Australian property market. Copyright © 2002 John Wiley & Sons, Ltd.

Introduction As discussed in Chapter 1, foreign direct investment (FDI) flows have become an important part of total investment flows, and now play a major role in growth and development. National and local governments across the planet have adopted various types of policies to attract or deter inward FDI. Allegedly, developed countries have converged on less discriminatory regimes toward foreign investors. A tally of the number of changes in foreign investment regulation seems to underscore this trend (Table 1.2). However, Table 1.2 also shows that the number of restrictive measures have increased dramatically since 2001, probably as a response to the global recessions of 2001 and 2008, and regional crises inmost corners of the world. There is also great variance in the orientation of investment regimes across countries and over time, even among OECD countries. In recent years, discontent toward foreign investors has become rampant not only in crisis-stricken countries, but is expressed in a rhetoric that resonates with the the policy debates of the 1970s. In this chapter, I present a formal derivation of the logic behind the partisan theory of foreign investment, which aims at explaining the observed variance in regulatory regimes toward foreign investment and the positive association between left-leaning governments and direct investment flows.1Given that the conditions for investment are present, domestic politics is likely to play a major role in shaping how foreign investment is regulated, or how open countries are to FDI.

This paper analyzes the Australian property market, the relationships between cities, houses and units, and the stock market with a focus on bubbles and crashes. Using monthly housing and unit prices for all eight capital cities we find that bubbles are more frequent, last longer and are more synchronized than crashes. Also, crashes do not immediately follow bubbles and are more prevalent across apartment units. Despite the existence of corrections in property prices the average returns and the risk-return relationships are more favorable in the property market than the stock market. We also identify a strong and positive change in correlations between the stock market and the property market around the global financial crisis consistent with financial contagion. A Vector Autoregression (VAR) further shows that policy interest rates and stock market returns significantly influence property prices which in turn influence the cash rate and the stock market. The relative stability of Australian property prices over the last 20 years suggests that policy makers played a role by providing an accommodating environment.

This article highlights the role of the legislative framework for direct foreign investment (DFI) and private sector development in ASEAN. The importance ofDFI, the role and objec tives of policy legislation in affecting DFI decisions, and the primary investment legislation are examined. The article concludes with some ideas on the policy legislation trends in the 1990s, and in so doing it considers whether much more needs to be done to keep pace with the formidable changes in many parts of the world.

PurposeThe purpose of this paper is to examine the of characteristics of Lagos, Nigeria property market and its submarkets on the prism of the market practitioners’ characteristics, market transaction structure and market maturity. This is done with a view to provide information capable of improving the flow of foreign real estate investment to the Lagos property market.Design/methodology/approachPrimary data were sourced through questionnaire administered on firms of property practitioners in the market. A total of 190 firms were selected using the stratified random sampling technique based on their geographical location. Descriptive statistics and Mann−Whitney U Test were employed for data analysis.FindingsThe results showed that the Lagos property market was characterised by practitioners whose highest level of education was majorly first degree, and with a mean computer literacy ranking of 3.38 on a five-point Likert scale. Also, major transactions in the market included letting and sales. The market maturity index of the market was 2.95 and therefore adjudged as an emerging market. The analysis also revealed that there was no significant difference in the characteristics of the submarkets.Practical implicationsThe results of the study are capable of enhancing investment decision in the market.Originality/valueThe study differentiates itself from and adds to the previous studies on market characteristics through an examination of the property market on the prism of the market transaction structure, market practitioners’ characteristics and maturity of the market holistically in the context of an African emerging market.

In the late 1950s, Japanese investment in East and Southeast Asia was designed almost exclusively to extract raw materials for the home market. Firms in labor-and capital-intensive industries – textiles, chemicals, and steel – shifted some of their production to the region in the 1960s and 1970s, when wage rates, land prices, and environmental regulations in Japan began to pinch their domestic operations. These manufacturers had another motive, namely, to continue to supply markets that host governments in Asia had begun to protect. That was the “old wave” of Japanese FDI. Conventional wisdom suggests that, beginning in the mid 1980s, three factors conspired to create a “new wave” of export-oriented investment in Asia. The first was the deliberate effort by a number of Southeast Asian states to jump-start their sluggish economies by adopting policies to attract foreign investment and stimulate exports. Firms from Japan, as well as the United States, Europe, and the Asian NICs, responded enthusiastically. The second factor was the equally deliberate effort by some of Japan's most important trading partners, principally the United States, to erect new barriers to Japanese exports. To circumvent those barriers, Japanese firms not only invested heavily in the United States and Europe, but also scurried to construct export platforms in Asia. The third and most frequently cited factor was the Plaza Accord, which triggered a chain reaction that ultimately led to an eruption of Japanese capital.

The benefits of measuring the Australian property investment universe are highly significant. The information can provide the basis for property asset allocation, be a key measure of a nation's wealth and indicate property market opportunities for institutional investors. This research examined three property universe models, each measuring a different component of the Australian property investment market at a specific point of time. Linked together with overseas comparisons, these models provided an outline of the Australian property investment universe. As at December 2003, the Australian property investment universe is estimated to be approximately $332 billion, with a core property market (office, retail and industrial) of $154 billion. However, with institutions owning $104 billion of Australian properties (PIR 2003) and applying overseas research on comparing property investment markets to invested institutional property markets, the findings tended to support the suggested Australian property investment universe figures.