The Effect of Foreign Direct Investment and Inflation on The Economic Growth of ASEAN Countries 2009-2020 (original) (raw)
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European Journal of Business and Management Research, 2020
Abstract—This research aims to determine the effect of the inflation rate, exchange rate and gross domestic product to the foreign direct investment in the ASEAN countries in periods of 2007-2016. The object of this research is the foreign direct investment in 11 countries of ASEAN region such as; Brunei Darussalam, Philippines, Indonesia, Cambodia Laos, Malaysia, Myanmar, Singapore, Thailand, Timor-Leste and Vietnam. The data used are secondary data with analysis by a panel data regression model using with an estimated model of random effect which were processed by Eviews tools version 10. The results of this study indicate that simultaneously the inflation rate, exchange rate, and gross domestic product have a very significant effect to the foreign direct investment. Partially, the inflation rate has a significant negative effect on foreign direct investment, while the exchange rate has a significant positive effect on foreign direct investment. The further analysis showed that the gross domestic product has no significant effect on foreign direct investment. Keywords—Inflation Rate, Exchange Rate, Gross Domestic Product, Foreign Direct Investment.
Foreign Direct Investment and Growth in ASEAN-4 Nations
International Journal of Business and Management, 2009
The study tested the impact of FDI and Gross Domestic Investment on growth in Malaysia, Thailand, Indonesia, and the Philippines-significant FDI recipients within the developing world in the last three decades. The study's time-series analysis employing the Autoregressive Distributive Lag (ARDL) technique suggests that the FDI is better than Domestic Investment for growth in Malaysia, Indonesia but not for Thailand and the Philippines where the reverse is true.
How Foreign Direct Investment Increase Economic Growth of ASEAN
Yizka Adikrista Utama, 2018
In this paper we investigate the effect of Foreign Direct Investment (FDI) it has been viewed as a power affecting economic growth directly and indirectly into each country of ASEAN and also economic integration give positive impact, As the economic union with the biggest economy among other union, it is the largest recipient of FDI from the region. This investment is expected to not only expand the size of the market and the search for resources, but also to make ASEAN a production base for exports. In this case, reviewed a number of researchers examining the relationships FDI increased economic growth among the other member union, especially the impact of FDI that tends to suggest that FDI inflows have a positive effect on economic growth.
International Journal of Islamic Education, Research and Multiculturalism (IJIERM)
This study intends to conduct empirical testing related to the effect of foreign debt, foreign direct investment, and inflation on economic growth in 7 ASEAN Countries during the period 2012-2020. The research method uses a quantitative approach with populations using Indonesia, Thailand, the Philippines, Myanmar, Vietnam, Laos, and Cambodia. The data analysis technique uses panel data regression with skunder research data type. The results showed that partially foreign debt had a negative and significant effect on economic growth. Meanwhile, foreign direct investment has a positive and significant effect on economic growth. Meanwhile, inflation also has a positive and significant effect on economic growth. However, simultaneously, foreign debt, foreign direct investment, and inflation affected economic growth in 7 ASEAN countries during the 2012-2020 period.
GDP Growth and FDI Nexus in ASEAN-5 Countries: The Role of Macroeconomic Performances
Jejak: Jurnal Ekonomi dan Kebijakan, 2023
Numerous papers have examined the effect of national income on FDI using crosscountry data, including in developing countries. However, few papers focus on one specific region, particularly in ASEAN developing countries. This study analyzes the effect of GDP growth on FDI in ASEAN-5 countries from 2004 to 2019. Panel data regression with fixed effect estimation was performed to document the relationship between GDP growth and FDI. Using some macroeconomic control variables, the findings demonstrated that GDP growth has a positive and significant impact on the FDI. Additionally, the effects of the currency rate, trade openness, and inflation on FDI are positive. Therefore, macroeconomic performances such as GDP growth, exchange rate, trade openness, and inflation are the main factors attracting FDI in ASEAN-5 countries.
The Relationship between Foreign Direct Investment and Economic Growth of Selected ASEAN Countries
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2008
In this paper, the dynamic relationships between foreign direct investment (FDI), domestic investment and other determinants of economic growth were examined. Both the short-run and long-run growth processes were modelled using the ARDL approach to carry out cointegration analysis for five ASEAN countries. The main results included (i) domestic investment, FDI, human capital and financial intermediation significantly affected economic growth; (ii) FDI had a positive and significant effect on growth but this was of lesser magnitude as compared to domestic investment; and (iii) a strong support was found for an export-led-growth hypothesis, and the impact of technology transfer from international trade was larger than direct technology transfer from FDI. All in all, our empirical results from the ASEAN countries confirm the view that investments and exports are the engines of growth and it is worthwhile for the authorities to encourage domestic as well as foreign capital to put these countries back on their pre-crisis growth paths.
Revisiting the foreign direct investment-led and export-led growth hypotheses in ASEAN+3 countries
Economic Horizons, 2020
In this paper, the effects of Foreign Direct Investments (FDIs) and exports on economic growth in the Association of Southeast Asian Nations Plus Three countries are explored. The panel data of a total of 13 countries pertaining to the period from 2008 to 2018 were analyzed. Based on the result of the Lagrange Multiplier (LM) test, the data fit to the random effect model. In a similar fashion, the Wald test suggests that there is no endogeneity problem in the given model. Furthermore, the results of the Hausman and Chow test also indicate that the random effect model is the most effective model to describe the effects of FDIs and exports on economic growth. The results prove that FDIs positively impact economic growth. In addition, exports also have a positive and meaningful effect on economic growth. Overall, the paper empirically confirms FDI-led growth and export-led growth. To conclude, the findings indicate the fact that FDIs and exports are crucial for boosting the economic growth of the ASEAN+3 countries. The ASEAN+3 region remains quite an attractive destination for international companies around the world when FDIs and trade are concerned.
Economic Growth in ASEAN-4 Countries: A Panel Data Analysis
This paper examines the impact of economic variables which are foreign direct investment (FDI), openness and gross fixed capital formation to economic growth which indicates using gross domestic product (GDP) over the period 1981-2008. The impact of variables to GDP is estimated using three panel estimation models which are called pooled model (pooled), fixed effects model (FEM) and random effects model (REM). The findings show that all variables are correlated with each other and also have the positive relationship to GDP. Hence, all variables may lead economic growth boost when they are increase whereas FDI becomes the most efficient variable in order to assist economic growth and followed by openness and gross fixed capital formation. Otherwise, the result in Ordinary Least Squares (OLS) which implies in this study as well test all variables stationary at 5 percent level of significant. These shows only gross fixed capital formation is significant to growth and contributes the positive effect to GDP in each ASEAN-4 countries. However, OLS estimation result for Indonesia shows the other variable has significant to growth which is openness; while it gives the negative affect the GDP. Instead of Indonesia, openness is not significant at other ASEAN-4 countries such as Malaysia, Thailand and Philippines. Besides, other variable is FDI also not significant in the case of all ASEAN-4 countries. It means that, openness does not correlated to growth for Malaysia, Thailand and Philippines countries; while FDI is not correlated to growth for all ASEAN-4 countries in this study.
Foreign Direct Investment (FDI) is a long-term foreign capital flow and relatively is not vulnerable to economic turmoil. ASEAN countries have become the world's FDI destination. Numbers amount of FDI will contribute to the GDP and economic growth of a nation. The goal of this study is to to analyze and study the consequence of FDI on industrial sectoral GDP in ASEAN Developing Countries. This research is quantitative. Secondary information from each country during the previous 14 years was used. (2006-2019), A totally of 84 data are collected for each research variable. This study used data panel analysis and e-Views help to calculate the data. The end outcome that FDI had a strong and favorable influence on ASEAN Developing countries' industrial GDP.