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Analysis of Foreign Direct Investment (FDI) in ASEAN-5 in 2000-2019
Abstract
This study seeks to analyze the impact of macroeconomic variables on the inflow of Foreign Direct Investment (FDI) in the ASEAN-5 nations—Indonesia, Malaysia, the Philippines, Thailand, and Singapore—during the period from 2000 to 2019. This research examines the macroeconomic factors of Gross Domestic Product (GDP), labor, exchange rate, and inflation. A quantitative research methodology is employed, utilizing panel data regression with the Fixed Effect Model (FEM) for model estimation. This model considers country-specific attributes that may affect foreign direct investment (FDI). The analytical results indicate that, when assessed individually, GDP and labor exert a significant and positive impact on FDI inflows, suggesting that more robust economies and larger labor forces draw increased investment. Conversely, currency rates and inflation do not exert a statistically significant influence on foreign direct investment (FDI). Nevertheless, when these four variables are evaluated concurrently, the results indicate that collectively they exert a substantial influence on FDI inflows in the ASEAN-5 nations during the study period.
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DOI: https://doi.org/10.20961/bfde.v3i2.109722
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