Panel data analysis of foreign direct investment, control of corruption, and economic growth: Evidence from ASEAN-6 countrie

Abstract

This research is to examine the role of management of foreign direct investment and control of corruption in economic growth. The research data were collected from the ASEAN-6 countries including Indonesia, Malaysia, Thailand, Singapore, Philippines, and Vietnam during the period of 2002-2021. The research utilizes the panel vector autoregressive (PVAR) method developed by Abrrigo and Love (2015) [Abrigo, M. R. M., & Love, I. (2016). Estimation of panel vector autoregression in Stata.] to estimate the research model. The estimation results show that foreign direct investment and corruption control play an important role in promoting economic growth in the ASEAN-6 countries. Furthermore, foreign direct investment and corruption control are closely related to each other, indicating that economic growth is not only directly affected by foreign direct investment and corruption control but also indirectly influenced by each of these factors. This is a new finding of this research compared to previous studies. These findings provide significant empirical evidence for the ASEAN-6 countries, particularly in managing foreign direct investment and controlling corruption to promote economic growth. The implication of these results is that these countries identify appropriate policies to manage FDI and corruption control in order to maximize the level of economic growth.