Abstract
Central bank policy interest rate has a role in economic activity such as investment in 5 ASEAN countries. The occurrence of the Asian Financial Crisis (AFC) in 1997-1998 changed the number of investments in the ASEAN-5 countries that were previously the destination of investors from developed countries. The declining level of economic and industrial stability in ASEAN-5 countries has reduced investor interest in investment. However, after AFC, from 2000 to 2019, 5 Southeast Asian countries (Singapore, Indonesia, Malaysia, the Philippines, and Thailand) experienced an increase in investment. This study aims to analyze the effect of Central bank policy interest and macroeconomic variables such as GDP, Exchange Rate, Inflation, and Labor rate on investment in 5 ASEAN countries. The analytical method used in this study is Panel Autoregressive Distributed Lag (ARDL) with Pooled Mean Group (PMG) estimation. The results showed that the Central bank policy interest rate, Inflation, and Labor have a positive and significant effect on investment in the long term. Meanwhile, in the short-term, GDP has a positive and insignificant effect on investment.
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