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Capital Depth and Entrepreneurial Vitality: Market Capitalization Growth and Cross-Border Investment Flows in the Philippines and ASEAN

Year: 2026

Type: article

Abstract: Entrepreneurship research on Southeast Asia has emphasized institutional, regulatory, and cultural determinants of ecosystem strength while giving comparatively less attention to the role of capital market depth and cross-border investment flows as structural enablers of entrepreneurial activity. This paper addresses that gap through an analytical, secondary-data review examining market capitalization growth and its relationship to entrepreneurial ecosystem strength, alongside the strategic implications of foreign direct investment (FDI) and portfolio investment flows, across the Philippines and five ASEAN comparators (Thailand, Viet Nam, Malaysia, Singapore, Indonesia) benchmarked against global reference economies. Using World Bank World Development Indicators data extracted for 2010–2024, the analysis finds that ASEAN capital markets moved in structurally divergent directions over the period rather than converging, consistent with documented regional heterogeneity. The Philippines exhibits a distinctive three-channel profile: declining market capitalization (−21.0 percentage points of GDP), the region's strongest relative FDI growth (an 8.78-fold increase in absolute inflows), and the highest portfolio investment volatility among ASEAN comparators, with six net-flow sign reversals and a net outflow position by 2024. These findings suggest that market capitalization functions as an incomplete proxy for entrepreneurial ecosystem strength in frontier and intermediate ASEAN markets, that FDI may operate as a substitute rather than complementary financing channel where domestic capital markets are contracting, and that portfolio investment's capital-access benefits remain inseparable from reversal risk shaped by regional interdependence. The paper concludes that capital market depth, FDI, and portfolio investment should be treated as analytically distinct financing channels in ASEAN entrepreneurship research and practice, with direct implications for entrepreneurial financing strategy and capital market policy in the Philippines specifically. As a descriptive, secondary-data design, the study establishes association rather than causation and identifies firm-level and FDI-composition research as priorities for future work.

Source: Journal of Enterprise Strategy and Management Innovation

DOI: 10.65166/b4vrsd73

Authors: Shuangxin Chen, Ramon George O. Atento, Tong Feng, Qianwei Tan, Rey Fernan Refozar, Lalaine Manalo

Institutions: ZhengZhou Shengda University Of Economics, Business & Management, First Asia Institute of Technology and Humanities, Qilu University of Technology, Shandong Academy of Sciences

Language: English

Topic: Private Equity and Venture Capital

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: hybrid

OpenAlex ID: W7203910748

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