Abstract
Foreign Direct Investment (FDI) believed to be one of the instruments to reduce gap between the rich and the poor countries has considered Asian countries destination, including ASEAN Region. The aim of this study was to analyze factors affecting FDI in ASEAN countries (Cambodia, Indonesia, Malaysia, Philippines, Thailand, and Vietnam) during 2007-2016. The method used to analyze the data was multiple linear regression. The results indicated that market size, government integrity, and infrastructure quality positively affected FDI; wages and exchange rates negatively affected FDI; while, economic crisis had negative effect only in Malaysia. Meanwhile, economic openness, tax rate, and interest rate did not affect FDI inflow in ASEAN countries.
Highlights
Many believe that Foreign Direct Investment (FDI) is one of the factors that has accelerated economic growth and since the early of 1990s the flow of FDI to Asian emerging countries has increased substantially
In 2008 there was a significant decline from Laos, Philippines and Thailand. even Singapore fell 76.81% in FDI. on the contrary the increase in FDI inflows in 2008 occurred in Indonesia, Myanmar and Vietnam which rose above 30% compared to 2007
Based on the results and discussion of the research, we conclude that market size, government integrity, and quality of infrastructure have a positive and significant impact on FDI in 6 ASEAN countries during the period of 2007-2016
Summary
Many believe that Foreign Direct Investment (FDI) is one of the factors that has accelerated economic growth and since the early of 1990s the flow of FDI to Asian emerging countries has increased substantially. The flow of FDI into Asian emerging countries has increased rapidly since the early 1990s and despite the downturn during the Asian crisis, FDI inflows to these countries have rapidly increased after the crisis (Kurniati and Yanfitri, 2007). Many factors influences the influx of FDI, such as conditions of recipient countries of FDI (pull factors) and conditions as well as strategies of foreign investors (push factors). The push factors include investment production strategies of investors, as well as risk perceptions of the recipient country. Abubakar et al (2012) identified infrastructure significantly and positively affected FDI inflows into Malaysia, since the availability of infrastructure has attracted FDI and further accelerated the pace of economic development
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