1. The relationship between good governance and foreign direct investment in East Asias knowledge- based economic growth Debnath Sajit Chandra, Doctor with Business Expertise (DBE) Program, Kyushu University; PhD Candidate, Ritsumeikan Asia Pacific University, Japan. Dr. A Mani, Professor at Ritsumeikan Asia Pacific University, Japan.

2. Contents Introduction Methodology and data sources Different approaches of economy Relationship mechanism among good governance, FDI and KBE in East Asia The impact of good governance in promoting KBE in East Asia – Good Governance in East Asia – The Role of good governance in promoting KBE in East Asia – The Current Status of Knowledge-based Economy in East Asia Statistical Findings Conclusion

3. Introduction Knowledge-based economy: An economy that creates and diffuses knowledge and thereby achieves economic growth. Different schools of growth theory, whether of the neoclassical or endogenous types, have all recognized the indispensable role of technological progress and its corollary, knowledge, in sustaining the growth process and increasing the level of per capita income. Many East Asian economies have shown remarkable success in creating a knowledge-based economy. This paper attempts to explain the relationship between good governance and foreign direct investment in East Asias knowledge-based economic growth.

4. Methodology and Data Sources Methodology – Qualititative Analysis. – Quantitative Analysis using SPSS software. Data Sources – Qualitative Analysis Published articles and books – Quantitative Analysis Worldwide Governance Indicators, 1996-2007 available at http://info.worldbank.org/governance/wgi/sc_country.asp http://info.worldbank.org/governance/wgi/sc_country.asp IMD online. Government Finance Statistics Yearbook 2007. UNESCO online database (http://stats.uis.unesco.org).http://stats.uis.unesco.org World Development Index Database. The Conference Board and Groningen Growth and Development Centre, Total Economy Database, September 2008. Retrieved from http://www.conference-board.org/economics/ on 8 th November, 2008.http://www.conference-board.org/economics/

5. Different approaches of economy Neoclassical Approach Knowledge Economy Approach Industrialization Knowledge-based Economy Economic Growth The Innovation System Education and Human Resources Information and Communication Technology Economic Incentives and Institutional Regime Explains shift from traditional economic system Does not explain shift from traditional economic system Market-friendly view State Interventionist View Combination of Market-friendly and State Interventionist View Knowledge-based Economy View Developmental State Approach Market-Enhancing Approach

6. Relationship mechanism among good governance, FDI and KBE in East Asia Good Governance Attracts FDI and allows Domestic Investment Development of KBE Infrastructure KBE

7. The impact of good governance in promoting KBE in East Asia – Good Governance in East Asia – The Role of good governance in promoting KBE in East Asia – The Current Status of Knowledge-based Economy in East Asia

14. The impact of good governance in promoting KBE in East Asia – Good Governance in East Asia – The Role of good governance in promoting KBE in East Asia – The Current Status of Knowledge-based Economy in East Asia

18. Taiwans data is not available.

19. The impact of good governance in promoting KBE in East Asia – Good Governance in East Asia – The Role of good governance in promoting KBE in East Asia – The Current Status of Knowledge-based Economy in East Asia

20. CountryRank Change in Rank from 1995 Missing Data KEIKI Economic Incentives and Institutional Regime The Innovation System Education and Human Resources Information and Communicatio n Technology (ICT) Taiwan12X8.678.788.359.248.039.07 Japan2 8.538.807.719.158.708.55 Singapore3X8.417.979.719.565.169.19 Hong Kong48.187.719.68.635.239.27 Malaysia50X6.16 6.186.824.357.3 China71X4.364.484.015.14.064.28 Current Status of KBE in East Asia

21. Statistical Findings Regulatory Quality Rule of Law Government Effectiveness Voice & Accountability Political Stability Control of Corruption FDI inflows ** Public spendin g on Educati on ** R&D Expend iture *** ICT Expend iture **

22. Conclusion It is evident that the same countries that have superior good governance have performed better in terms of creating knowledge-based economy. This study of selected East Asian Countries indicates a positive relationship between FDI in East Asias knowledge-based economic growth.

23. Thank you for your attention