Hong Kong Firms in the ASEAN Region: Transnational Corporations and Foreign Direct Investment

Abstract

Economic links between Hong Kong and the ASEAN (Association of South East Asian Nations) region are historically strong. In this paper, by means of extensive secondary data sources, some facets of these links in relation to the transnational operations of Hong Kong firms and their foreign direct investment (FDI) flows in ASEAN countries are examined. It is found that out of thirty leading Hong Kong transnational corporations (TNCs), nineteen have together more than forty-three operations in ASEAN. Hong Kong TNCs in the tertiary sector are particularly inclined to establish cross-border operations in the ASEAN region. Any explanation of the operations of these TNCs in ASEAN must take into consideration ongoing network relations embedded in peculiar historical contexts and geographical confines. In terms of equity capital inflows, Hong Kong FDI in the ASEAN region regained its momentum after 1985. Indonesia and Thailand are the most favoured destinations for Hong Kong FDI. In these two countries, Hong Kong FDI ranks, respectively, as the second and third largest foreign investment. Future studies need to address the issue of Hong Kong's uncertainty over the ‘1997’ question and of theory-building in international business.