HR 737: an analysis on the impact of the house resolution 737 to the Philippine agricultural industry
Date
2010-03
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Abstract
This paper investigates whether the House Resolution 737, which allows 100% foreign ownership of businesses and lands here in the Philippines, will affect the amount of foreign direct investments entering the Philippine economy specifically in the agricultural sector. By determining the investment flows using the data from OECD International Direct Investment Statistics Yearbook from 2004 to 2007, we used the Gravity Model of Investment to demonstrate how an investor country will react on the changes in the host country's policy restrictions regarding the foreign ownership of businesses and lands. Along with other significant variables, we tested our Gravity model under two simulations using dummy variables, one which represents the current prevailing policy and the other representing the investment policy with the implementation of HR737. Deriving the change in FDI had the Philippines adopted the bill, we found out that HR 737 would positively affect the FDI inflow to the Philippines and that positive effect would translate to an additional inward FDI flow to the Philippine agricultural sector.
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Keywords
House resolution, Agricultural industry, Philippine agricultural economics, House resolution 737, Foreign direct investment