Foreign Direct Investment and Manufacturing Performance in the Philippines: Evidence from WDI, 2000–2024
DOI:
https://doi.org/10.65166/qasnh058Keywords:
Business analytics, Policy analytics, Decision support, Foreign direct investment, Manufacturing value added, Philippines, Time-series modelling, World Development IndicatorsAbstract
This study develops a replicable business analytics evidence base on the relationship between inward foreign direct investment (FDI) and manufacturing performance in the Philippines using annual World Development Indicators (WDI) data for 2000–2024. Manufacturing performance is evaluated along two complementary dimensions: (i) manufacturing value added growth as a short-run performance indicator and (ii) manufacturing value added as a share of GDP as a structural transformation indicator. The analytic strategy applies parsimonious dynamic time-series models in which manufacturing outcomes are regressed on lagged inward FDI intensity (net inflows as a percentage of GDP), while conditioning on inflation and the development path (GDP per capita) and isolating the discrete COVID-19 disruption. Statistical inference is conducted using heteroskedasticity-and-autocorrelation-consistent (HAC/Newey–West) standard errors to support audit-ready decision interpretation. Results indicate that lagged inward FDI intensity is not statistically associated with either manufacturing growth or manufacturing share once macro dynamics and major shocks are controlled. Manufacturing outcomes are instead dominated by persistence in time-series behavior and sensitivity to economy-wide disruptions, particularly during the pandemic period. Robustness checks using alternative FDI operationalizations and pandemic sensitivity re-estimation yield consistent conclusions. From a health-and-business analytics perspective, the findings imply that aggregate FDI inflow intensity has limited decision value as a standalone indicator for manufacturing performance monitoring, motivating a shift toward analytics frameworks that incorporate investment composition, sectoral allocation, and linkage/absorptive-capacity indicators relevant to supply-chain resilience and system stability.
Downloads
References
Amos, O., & Obansa, S. (2025). Impact of foreign direct investment on the growth of Nigeria’s economy: (A case of the manufacturing sector 1980-2023). Journal of Economics, Innovative Management and Entrepreneurship. https://doi.org/10.59652/jeime.v3i2.440
Atento, R. G. (2025). The credibility imperative 2025: Governance integrity, economic resilience, and strategic adaptability in Philippine diplomacy. International Journal of Health & Business Analytics, 1(2). https://doi.org/10.65166/6amaz997
Atento, R. G. (2025b). Valuation metrics, market efficiency, and investor sentiment: A descriptive analysis of Philippine Stock Exchange–listed firms. International Journal of Health & Business Analytics, 1(1). https://doi.org/10.65166/6kbeat87
Atento, R. G., Quinto, L., Espelita, C. A. M., & Castaneda, C. (2025). Integrating business and health analytics: A conceptual framework for dual outcomes in healthcare. International Journal of Health & Business Analytics, 1(1). https://doi.org/10.65166/04pdc866
Basak, C., Gupta, R., & Ghosh, P. (2021). Foreign direct investment in India-an invincible way for economic development. EPRA International Journal of Research and Development, 6(12), 269–271. https://doi.org/10.36713/epra6968
Bostan, F., & Karadağ, M. (2025). The effects of international technology spillover channels on innovation performance: An application on Turkish manufacturing industry. Journal of the Knowledge Economy, 16, 16698–16724. https://doi.org/10.1007/s13132-024-02560-1
Chiwuike, E., Ebiringa, O., & Gloria, C. (2023). A multi-sectoral analysis of effects of foreign direct investment on Nigeria’s output growth. Account and Financial Management Journal, 8(2). https://doi.org/10.47191/afmj/v8i2.04
Chukwu, A., & Adewuyi, A. (2023). Foreign direct investment, sectoral output performance and poverty in Africa: Evidence from panel structural vector autoregressive and threshold regression models. International Journal of Finance & Economics. https://doi.org/10.1002/ijfe.2799
Elkomy, S., Ingham, H., & Read, R. (2020). The impact of foreign technology and embodied R&D on productivity in internationally oriented and high-technology industries in Egypt, 2006–2009. Journal of Industry, Competition and Trade, 21(1), 171–192. https://doi.org/10.1007/s10842-020-00349-x
Eze, A., Nnaji, M., & Nkalu, N. (2019). Impact of foreign direct investment on manufacturing sector output growth in Nigeria. International Journal of Applied Economics, Finance and Accounting, 5(2), 55–64. https://doi.org/10.33094/8.2017.2019.52.55.64
Fazaalloh, A. (2024). FDI and economic growth in Indonesia: A provincial and sectoral analysis. Journal of Economic Structures, 13(1). https://doi.org/10.1186/s40008-023-00323-w
Kersan-Škabić, I., & Barišić, A. (2023). Foreign direct investments and participation in global value chains: New evidence from advanced manufacturing industries in Central and Eastern Europe. *E+M Ekonomie a Management, 26*(4). https://doi.org/10.15240/tul/001/2023-4-001
Lan, P., Trang, N., & Minh, N. (2024). FDI spillover effect on the green productivity of Vietnam manufacturing firms: The role of absorptive capacity. Journal of Applied Economics, 27(1). https://doi.org/10.1080/15140326.2024.2382653
Liu, S., & Guo, J. (2022). The influence of FDI and environmental uncertainty on the business performance of enterprises—A case study of manufacturing enterprises. Advances in Engineering Technology Research, 1(2). https://doi.org/10.56028/aetr.1.2.226
Mehta, N., Gupta, S., & Maitra, S. (2023). Impact of foreign direct investment on manufacturing sector: Evidence from Indian economy. Finance: Theory and Practice, 27(1), 116–126. https://doi.org/10.26794/2587-5671-2023-27-1-116-126
Mim, S., Hedi, A., & Ali, M. (2021). Industrialization, FDI and absorptive capacities: Evidence from African countries. Economic Change and
Restructuring, 55(3), 1739–1766. https://doi.org/10.1007/s10644-021-09366-0
Moralles, H., & Moreno, R. (2020). FDI productivity spillovers and absorptive capacity in Brazilian firms: A threshold regression analysis. International Review of Economics & Finance, 70, 257–272. https://doi.org/10.1016/j.iref.2020.07.005
Mwakasungula, A., & Rwabishugi, L. (2024). Assessing the impact of foreign direct investment on the manufacturing sector in developing countries: Empirical evidence from Tanzania. The Accountancy and Business Review, 16(2). https://doi.org/10.59645/abr.v16i2.198
Mwinuka, L., & Mwangoka, V. (2023). Manufacturing sector’s growth in Tanzania: Empirical lessons from macroeconomic factors, 1970–2021. Cogent Economics & Finance, 11(1). https://doi.org/10.1080/23322039.2023.2223419
Negash, E., Zhu, W., Lu, Y., & Wang, Z. (2020). Does Chinese inward foreign direct investment improve the productivity of domestic firms? Horizontal linkages and absorptive capacities: Firm-level evidence from Ethiopia. Sustainability, 12(7), 3023. https://doi.org/10.3390/su12073023
Obani, C., Nsofor, E., & Agu, C. (2024). Impact of foreign direct investment on manufacturing sector growth in sub-Saharan Africa. World Journal of Advanced Research and Reviews, 21(1). https://doi.org/10.30574/wjarr.2024.21.1.2581
Oputa, N. (2025). Effect of inward foreign direct investment on manufacturing capacity utilisation in Nigeria. IOSR Journal of Business and Management, 27(6), 9–17. https://doi.org/10.9790/487x-2706040917
Orji, A., Uwakwe, J., Anthony-Orji, O., Ogbuabor, J., & Obiorah, J. (2025). Foreign direct investment, capital flows, and sectoral growth in Nigeria: A comparative analysis of agriculture and manufacturing. Innovation Economics Frontiers, 28(2). https://doi.org/10.36923/ie-frontiers.v28i2.404
Orlić, E., Hashi, I., & Hisarciklilar, M. (2018). Cross sectoral FDI spillovers and their impact on manufacturing productivity. International Business Review, 27(4), 777–796. https://doi.org/10.1016/j.ibusrev.2018.01.002
Prasad, R. (2025). Impact of Atmanirbhar Bharat and Make in India initiatives on production and employment in India. Advanced International Journal for Research, 6(5). https://doi.org/10.63363/aijfr.2025.v06i05.1292
Quinto, L., & Atento, R. G. (2025). Economic growth and developmental equity in four ASEAN economies: Linking macroeconomic trends to employment and child nutrition (1999–2024). International Journal of Health & Business Analytics, 1(1). https://doi.org/10.65166/nq75nv94
Roy, I., & Paul, S. (2022). Knowledge spillovers and productivity growth: Role of absorptive capacity in the Indian manufacturing sector. Journal of Industry, Competition and Trade, 22(2), 233–257. https://doi.org/10.1007/s10842-022-00382-y
Sani, I., Samuel, A., & Ome, W. (2021). Foreign capital inflows and manufacturing sector growth in Nigeria. Malaysian Management Journal, 25, 157–172. https://doi.org/10.32890/mmj2021.25.10
Sugiharti, L., Yasin, M., Purwono, R., Esquivias, M., & Pane, D. (2022). The FDI spillover effect on the efficiency and productivity of manufacturing firms: Its implication on open innovation. Journal of Open Innovation: Technology, Market, and Complexity, 8(2), 99. https://doi.org/10.3390/joitmc8020099
Ullah, M., Sohail, H., Haddad, H., Al-Ramahi, N., & Khan, M. (2022). Global structural shocks and FDI dynamic impact on productive capacities: An application of CS-ARDL estimation. Sustainability, 15(1), 283. https://doi.org/10.3390/su15010283
Wong, Z., Chen, A., Peng, D., & Kong, Q. (2021). Does technology-seeking OFDI improve the productivity of Chinese firms under the COVID-19 pandemic? Global Finance Journal, 51, 100675. https://doi.org/10.1016/j.gfj.2021.100675
Yunus, N., & Abdullah, N. (2022). A quantile regression analysis of absorptive capacity in the Malaysian manufacturing industry. Malaysian Journal of Economic Studies, 59(1), 39–62. https://doi.org/10.22452/mjes.vol59no1.8
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Rey Fernan Refozar, PhD, Ramon George O. Atento, PhD, Andrea Gwyneth Atento, Cherry Ann Marie H. Espelita, MBA (Author)
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Authors retain copyright of their articles but grant the International Journal of Health & Business Analytics (IJHBA) the right of first publication.
