Foreign Direct Investment and Economic Environment—Based on the Evidence of ASEAN Countries

Abstract

Using the data onto foreign direct investment and the index of economic freedom, investment freedom, freedom of trade, monetary freedom and commercial freedom, this paper analyses the foreign direct investment in China and the ASEAN countries and five degrees of freedom. The results show that, after eliminate heteroscedastic, commercial freedom, monetary freedom and economic freedom significantly enhance a country's foreign direct investment, freedom to trade and to invest can inhibit foreign direct investment in a country. The 2009 global financial crisis also played a significant role in the impact on economic freedom of foreign direct investment, in which business freedom had a negative effect of a harsh international environment and a difficult domestic economy, while trade freedom was here It has played a positive role in the normal trade, but also eased the domestic economic environment and promoted the inflow of foreign direct investment.On this basis, the relevant policy suggestions of foreign direct investment and economic liberalization in China and ten ASEAN countries are drawn.