This study examines the determinants of foreign direct investment (FDI) from Europe to Asia based on the knowledge-capital model. The data include 38 European countries and 24 host Asian countries over the period 1995–2013. Empirical evidence from Poisson-pseudo maximum likelihood estimation method is in line with hypothesised predictions derived from the knowledge-capital model. In particular, the total income and the similarity in market size between two countries encourage horizontal FDI. We also find empirical support to vertical FDI in Asia where the difference in skilled labour endowments between European source and Asia host countries has a positive impact on FDI from Europe to Asia. Meanwhile, investment costs in Asian countries, trade costs to both source and host countries, and exchange rate volatility are negatively correlated to FDI. By contrast, sharing a common language, a bilateral investment treaty and a historical colonial relationship encourage FDI from Europe to Asia. In addition, heterogeneities in host countries’ geographical regions, exchange rate regimes, and governance system, and source countries’ Eurozone membership lead to differences in empirical findings. The results also signal some future trends and the roles of governments in both source and host countries in facilitating FDI.

中文翻译：

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从欧洲到亚洲的外国直接投资的决定因素

本研究基于知识资本模型研究了从欧洲到亚洲的外国直接投资 (FDI) 的决定因素。数据包括 1995 年至 2013 年期间的 38 个欧洲国家和 24 个亚洲东道国。泊松伪最大似然估计方法的经验证据与知识资本模型得出的假设预测一致。特别是，两国之间的总收入和市场规模的相似性鼓励横向 FDI。我们还发现对亚洲垂直 FDI 的实证支持，其中欧洲来源国和亚洲东道国之间熟练劳动力禀赋的差异对从欧洲到亚洲的 FDI 有积极影响。同时，亚洲国家的投资成本、来源国和东道国的贸易成本以及汇率波动与 FDI 呈负相关。相比之下，使用共同语言、双边投资条约和历史殖民关系鼓励从欧洲到亚洲的外国直接投资。此外，东道国地理区域、汇率制度和治理体系以及来源国欧元区成员资格的异质性导致实证结果存在差异。结果还表明了一些未来趋势以及来源国和东道国政府在促进 FDI 方面的作用。