The Effect of Budget Deficit, Foreign Direct Investment, and Human Development Index on Asean-5 Economic Growth

The goal of economic development is economic growth nor foreign direct investment, but this increase must be supported by improving the quality of people, the population, and reducing the level of corruption. The purpose of this study is to determine the impact of corruption on economic growth and foreign direct investment. Using the variables of economic growth, foreign direct investment, corruption perception index, population, and human development index. The sample is ASEAN-5 countries, namely Indonesia, Malaysia, Singapore, Philippines, and Thailand from 2010-2020. The findings of our first model show that neither the corruption perception index nor the population index is significant, while the human development index has a positive relationship and has a significant effect on foreign direct investment in ASEAN-5. The findings of our second model are that the corruption perception index has a negative and significant effect on economic growth, while the human development index and foreign direct investment have no significant effect on economic growth in ASEAN-5.

The prime objective of this study is to inspect the Impact of Government Expenditure (GE), Institutional Factors (IF), Foreign Direct Investment (FDI), Public Investment (PI), and Technological Innovations (TI) on Human Development Index (HDI) in Pakistan and China during the period from 1997 to 2017. The study broadly analyses and join in both theoretical and empirical literature pertaining to this subject. It commences by providing an overview of Impact of Government Expenditure (GE), Institutional Factors (IF), Foreign Direct Investment (FDI), Public Investment (PI), and Technological Innovations (TI) on Human Development Index (HDI) in Pakistan and China. Afterward, it categorizes current literature based on theoretical and empirical insights found in available works. Furthermore, the paper puts light on theoretical approaches that explain how it works. To conclude, the article recommends three auspicious proportions for future research in this area. By judgmentally investigating and creating prevailing theories and research, this study plays its role while understanding of the connection Between Government Expenditure (GE), Institutional Factors (IF), Foreign Direct Investment (FDI), Public Investment (PI), and Technological Innovations (TI) on Human Development Index (HDI) in Pakistan and China.

This study explores the impact of individual internet usage, foreign direct investment, and average years of schooling on economic growth in the ASEAN region during the period 2014-2020. The panel regression analysis method was employed to analyze secondary data obtained from the World Bank and UNDP. The results of the fixed-effects regression model indicate that the variables of individual internet usage (IUI) and foreign direct investment (FDI) have a positive and significant impact on economic growth, while the average years of schooling (MYS) do not have a significant impact. These findings are consistent with previous research findings indicating that internet usage and foreign direct investment significantly contribute to economic growth in the region. However, the average years of schooling do not have a significant influence on economic growth in this study's context. The study shows that internet usage and foreign direct investment have a significantly positive impact on economic growth in ASEAN, while the average years of schooling do not have a significant effect. These findings imply that economic development policies in ASEAN should focus on enhancing technology infrastructure and investment environments, as well as reevaluating the education system.

Asian and African regions have experienced periods of economic growth, yet they continue to grapple with distinct challenges and issues that hinder their ability to sustain and distribute that growth effectively. In addressing this concern, our research investigates the impact of exports, exchange rates, foreign direct investment, bank credit, government spending, and the Human Development Index on the economic growth of developing nations in Asia and Africa. The employed methodology is the panel least square method, which utilizes secondary data. The Asian region comprises 28 countries, and Africa encompasses 34 countries, from 1946 to 2018. The outcomes of the study reveal that within developing Asian countries, variables such as exports, exchange rates, foreign direct investment, bank credit, government spending, and the Human Development Index have positive and noteworthy effects on economic growth. In the context of African nations, the research finds that exports, exchange rates, and government spending have favorable and significant impacts. However, the Human Development Index displays a detrimental and significant influence. On the other hand, foreign direct investment and bank credit exhibit positive yet inconsequential effects on economic growth in developing African countries. Consequently, these findings underscore the need for robust macroeconomic foundations in developing economies to counteract global economic uncertainties. This strategy is imperative to facilitate swift economic expansion that aligns with each nation's distinctive economic development plans.

This study aims to analyse the impact of foreign direct investment, exports, the human development index, technology, and corruption on economic growth in ASEAN. This quantitative analysis employs panel data regression to identify the variables affecting economic growth in ASEAN. This study encompasses ten ASEAN countries: Brunei Darussalam, Indonesia, Cambodia, Malaysia, Singapore, Thailand, Vietnam, the Philippines, Myanmar, and Laos, covering the period from 2010 to 2023. This study's results demonstrate that foreign direct investment, exports, the human development index, and technology significantly and positively influence economic growth in ASEAN. Corruption does not significantly impede economic growth within ASEAN. The variables of foreign direct investment, exports, the human development index, technology, and corruption collectively exert a significant influence on economic growth in ASEAN. This study introduces technology as a significant influencing variable. The ASEAN government persists in upholding stability and enhancing the national economy. The government must implement decisive measures in state security and enhance transparency to prevent an increase in state corruption. Further research should focus on broadening the variables associated with economic growth and employing diverse methodologies.

Although ASEAN is known as a region with dynamic economic growth, significant disparities remain between countries in creating sustainable added value. Some countries, like Singapore, have successfully achieved economic transformation toward developed nation status, while others remain stuck in the middle-income category. This phenomenon raises questions about the role of external factors such as foreign direct investment (FDI) and structural factors like economic complexity (Economic Complexity Index/ECI) and industrial value added (Manufacturing Value Added/MVA) in driving economic growth in the ASEAN region. This study aims to analyze the influence of Foreign Direct Investment (FDI), Economic Complexity Index (ECI), and Industrial Value Added (MVA) on Gross Domestic Product (GDP) in five ASEAN countries, namely Indonesia, Malaysia, Thailand, the Philippines, and Singapore during the period 2017–2023. This study uses panel data obtained from the World Bank and Growth Lab. Data analysis was performed using EViews 9 software using a panel data regression approach. Model testing included the Chow and Hausman tests to determine the best model, and the results indicated that the Common Effects Model (CEM) was the most appropriate model for use in this study. The results show that FDI and MVA have a positive effect on Gross Domestic Product (GDP), indicating that increased foreign direct investment and a strengthening of the manufacturing sector play a significant role in driving national economic growth in the ASEAN region. Conversely, the ECI variable shows a negative effect on GDP, reflecting that increasing economic complexity has not yet fully yielded positive impacts due to imbalances between industrial structure, human resource capacity, and domestic innovation capabilities. This finding underscores the importance of a balance between strengthening economic complexity, the industrial sector, and improving the quality of human resources in accelerating economic growth in the ASEAN region.

In this paper, we have explored the relationship between three key indicators of the health of any economy, namely, human development index (HDI), foreign direct investment (FDI) and gross domestic product (GDP). Three alternative models were assessed in the study to investigate the dynamics of the cause and effect relationship between the three variables. Thirty countries were selected for the purpose of the study on the basis of a positive change in their HDI ranks from 2012 to 2017. Further, the countries were categorized into countries with very high, high, medium and low HDI ranks. Annual FDI, HDI and GDP data for the period from 1990 through 2016 were used to investigate the nature of the relationship among the selected variables. The proposed models testing the outcome-explanatory variable relationship between FDI, HDI, and GDP were tested using cointegrating regression with panel dynamic least square model (DOLS) and panel fully modified least square model (FMOLS). The findings of the study show that HDI and FDI are the statistically significant variables that positively impact the changes in GDP. Further, the impact of HDI is of larger magnitude than FDI. However, GDP and FDI were not found to exert any statistically significant impact on HDI for the period under the study. Similarly, HDI and GDP were also not found to exert any significant impact on FDI. Before applying DOLS and FMOLS, stationarity was confirmed using five panel unit root tests, namely, LLC, IPS, Fisher-type tests using ADF and PP and Hadri. Thereafter, Pedroni residual cointegration test and Kao residual cointegration test were used to confirm the existence of cointegration among the variables, which is a necessary condition for applying DOLS and FMOLS. The study has key implications for the policymakers in search of models and plans to boost GDPs of their respective countries. Since HDI exerts more than proportionate positive impact on GDP, governments can focus on improving the three components of HDI, namely, life expectancy, adult literacy and education enrolment to promote economic growth. Further, since FDI exerts a positive impact on GDP, policymakers can strategize to make more friendly policies to attract foreign investors.

This paper aims to examine the effect of shadow economy on foreign direct investment (FDI) in emerging market economies (EMEs) starting from 1988 to 2018. The error-correction model (ECM) is applied to estimate the dynamic panel data in the short run model, and for the long run model, this study applied ordinary panel data approach to both the fixed effect model (FEM) and the random effect model (REM). This study considers the global financial crisis of 1998 by dividing the estimation into three periods, i.e., pre-crisis, post-crisis, and all periods. The results show that shadow economy had a significantly negative effect on FDI inward both in the long run and the short run during the pre-crisis period, while economic growth, trade openness, policy rate, population, and infrastructure had various significant effects on FDI inward. The long-run estimation revealed that economic growth, policy rate, inflation, and the human development index (HDI) were all significant factors. Only the exchange rate, as one of efficiency-seeking motives and macroeconomic factors, has a significant role in FDI in EMEs. This analysis suggests that policymakers need to consider shadow economy along with investor motives and macroeconomic variables to provide more FDI, while investors need to consider the country’s advantages that could potentially provide a rate on return on investment.

This study aims to investigate the factors influencing economic growth in Southeast Asia, focusing on government expenditure, the Human Development Index (HDI), foreign direct investment (FDI), labor, and international tourism expenditure on Gross Domestic Product (GDP) in six Southeast Asian countries (Indonesia, Singapore, Thailand, Malaysia, Vietnam, and the Philippines) during the 2014–2021 period. Economic growth in this region is influenced by various external and internal factors that need to be examined more deeply. The method used is panel data regression with the Common Effects Model (CEM), Fixed Effects Model (FEM), and Random Effects Model (REM) approaches. The estimation results indicate that the FEM model is the most appropriate, with a coefficient of determination (R²) of 0.9993, meaning that 99.93% of GDP variation can be explained by these variables. Government expenditure and FDI have a significant effect on GDP, while HDI, labor, and international tourism expenditure do not show a significant effect. These findings align with previous studies suggesting that government expenditure and FDI are the main factors influencing economic growth, while the impact of other factors is more limited.

Economic growth is the main indicator of the success of a region's development. This study aims to analyze the effect of fiscal decentralization, investment, labor, and the Human Development Index (HDI) on economic growth in Indonesia. Fiscal decentralization is measured through the General Allocation Fund (DAU), Revenue Sharing Fund (DBH), and Special Allocation Fund (DAK), while investment is represented by Domestic Direct Investment (PMDN) and Foreign Direct Investment (PMA). The labor factor is measured based on the number of workers employed, while the HDI is used as an indicator of human resource quality. This study uses a quantitative approach, employing panel data regression with the Ordinary Least Squares method. Data were collected from 34 provinces in Indonesia from 2014 to 2023. The results of the study show that DAU, DBH, and DAK have a positive and significant effect on economic growth, indicating that fiscal transfers from the central government to the regions can encourage economic activity at the regional level. In addition, PMDN and PMA also have a significant positive impact on economic growth. However, labor does not show a significant effect on economic growth, indicating that the increase in the number of workers has not been accompanied by an increase in skills and work productivity. Meanwhile, the HDI has a positive and significant effect, confirming that improving the quality of education and health plays an important role in increasing labor productivity and economic growth. These findings emphasize the importance of optimizing fiscal policy, increasing the effectiveness of regional fund allocation, and workforce development and human development strategies to support sustainable economic growth in Indonesia.

The South Asian Association for Regional Cooperation countries prioritised economic growth and development, but continued to face persistent challenges like poverty, inequality, and sluggish progress in attaining sustainability. Therefore, the purpose of the study was to examine the impact of economic freedom index, foreign direct investment, and human development index on economic growth of South Asian Association for Regional Cooperation countries from 2005 to 2023. Fully modified ordinary least squares regression method was used as estimating technique. The results showed that both the economic freedom index with β = 1.9895; p-value = 0.0000, and the human development index with β = 0.6901; p-value = 0.0020 had a positive and significant effects on economic growth, suggesting that higher levels of economic freedom in addition to having a more skilled, healthy, and productive workforce were associated with improved economic growth. In contrast, both foreign direct investment with β = -0.2981; p-value = 0.0000 and official development assistance with β = -5.4552; p-value = 0.0000 exhibited negative and significant effects on economic growth. When multinational corporations repatriating profits to their home countries rather than reinvesting them in the region, corruption exists in the management of foreign aids, this may limit the benefits of foreign direct investment in the region. This study concluded that economic freedom index, foreign direct investment, and human development index affected economic growth in the South Asian Association for Regional Cooperation region. Therefore, to sustain growth, governments of these countries should implement policies that improve market efficiency, reduce bureaucratic bottlenecks, and strengthen legal institutions to attract high-quality investments

Purpose: This research aims to analyze the influence of inflation, labor, foreign direct investment (FDI), and external debt on economic growth in ASEAN countries during fintech 3.0 period.Method: This research employs a quantitative approach. The study includes 176 observations, comprising 11 cross-sectional units and 16 time series units. For data analysis, a panel data regression model is utilized, incorporating three approaches: the Common Effect Model (CEM), Fixed Effect Model (FEM), and Random Effect Model (REM). Based on the results, the Fixed Effect Model (FEM) is identified as the best model. The data used in this study are secondary data obtained from international institutions such as the World Bank, Asian Development Bank (ADB), and International Monetary Fund (IMF).Result: The results indicate that inflation has a negative but insignificant effect on economic growth, while labor has a significant negative effect. In contrast, foreign direct investment (FDI) and external debt demonstrate significant positive effects, underscoring the importance of strategic management of these two variables to promote economic growth.Practical Implications for Economic Growth and Development: The research provides recommendations for consistently managing inflation, enhancing technology-based education and training for the workforce, and maximizing the benefits of FDI through strategic management. Additionally, the prudent use of external debt to finance productive sectors, particularly infrastructure, is crucial for promoting inclusive and sustainable economic development in the ASEAN region.

This study aims to analyze the role of Information and Communication Technology (ICT), Foreign Direct Investment (FDI), and the Human Development Index (HDI) in shaping regional output in five provinces on the island of Java. The method used is panel data regression with a random effects approach, where ICT, FDI, and HDI are the independent variables, while Gross Regional Domestic Product (GRDP) is the dependent variable. The results show that all three variables have important and complementary roles in driving GRDP during the 2019–2023 period, but ICT has the most significant influence compared to HDI and FDI. This reflects the high technological advancement in Java and the crucial role of ICT in the region's economic growth. Practically, this study recommends strengthening digital infrastructure, improving the quality of human resources through technological literacy, optimizing FDI based on technology transfer, and accelerating digital transformation in the local economic sector through the development of a regional digital economy blueprint to encourage inclusive and sustainable growth. These findings are expected to enrich the literature and serve as a strategic policy reference for local governments in increasing GRDP in the five provinces on the island of Java.

The concept of three-dimensional sustainable development requires every country to increase economic growth by using natural resources rationally by considering environmental and social quality as a determinant of public welfare. In Indonesia, there has not been a balance between the three dimensions, for example, DKI Jakarta Province has high economic growth and Human Development Index (HDI), but Environmental Quality Index (EQI) is the worst. Whereas Papua and West Papua have good environmental quality but are not supported by good HDI. Efforts in sustainable development are planned that integrate environmental, social, and economic aspects in development strategies. Therefore, this study used the BPS Statistics-Indonesia data for analyzing the causality between economy, environment, and human development in 33 provinces of Indonesia, from 2013 to 2017. By using the simultaneous equation of the panel data (2SLS) method, it results show that there is a positive simultaneous relationship between HDI, economic growth, and environmental quality. The Variables that influence economic growth are HDI and Foreign Direct Investment (FDI). Variables that influence environmental quality are economic growth, HDI, FDI, and population, while in human development are economic growth, EQI, and poverty. Human development has a big contribution to the implementation of sustainable development in Indonesia.

Which country is more developed? Which country's foreign trade policies are more rational? In a globalized world, which country has higher added value and competitiveness in its exports? Questions like this are not easy to answer. Because there are many criteria for measuring the development of the economy and foreign trade of countries. In this context, an important index called The Economic Complexity Index (ECI) was created by Hidalgo and Hausmann to measure and compare the development of the country's economies and foreign trade. For this purpose, we test whether economic growth, foreign direct investment, Human Development Index, Economic Freedom Index cause economic complexity, vice versa in this study. We analyze annual data for the period 1996-2017 for 22 countries called Transitional Economies using the panel causality method. Considering all of Transitional Economies, according to the results of the Bootstrap Granger causality test, we were not able to determine a Granger causality relationship between economic growth, foreign direct investment, Human Development Index, Economic Freedom Index and Economic Complexity Index. However, when we consider country-specific variables defined as Transitional Economies, we identify both one-way and two-way Granger causal relationships in some countries between economic growth, foreign direct investment, Human Development Index and Economic Freedom Index, and Economic Complexity Index. Therefore, some Transitional Economies need to increase their level of economic complexity to get a larger share from global added value and increase their competitiveness. In this context, economic complexity needs to be taken more seriously by both scientists and policymakers, and decision-makers.