Meanwhile, trade liberalization or trade openness has great implication on the FDI
outflow (Kogut, 1983; Scaperlanda and Balough, 1983; Scaperlanda, 1992). The
association of higher degree openness led to higher level of FDI outflow is mainly due
to the acquisition of knowledge on the foreign market. This valuable knowledge
includes skills related to operating or managing production abroad. Eventually, this
will become the driving force for the firms to engage in the foreign investment rather
than relying on exportation. Firms will be able to gain advantage in term of
internalization (Dunning, 1993).