FDI in ASEAN-8: Does institutional quality matter?

Abstract

The importance of Foreign Direct Investment (FDI) as a driver of economic development is no longer a secret. As a result, the competition to attract FDI is getting stiffer as any economy in the world is currently eyeing for FDI, including the Association of Southeast Asian Nations (ASEAN). With the emergence of China as a new attractive location for FDI, and as part of the alternatives to further enhance the attractiveness of ASEAN, this study analyses the role of institutional quality on FDI inflows into ASEAN.

Keywords:

• institutional quality
• FDI
• ASEAN
• panel data analysis

JEL Classification:

• F21
• F23
• F36

Acknowledgement

The first author thanks Universiti Sains Malaysia for funding this project under Short-Term Research Grant No. 304/PMGT/6310092.

Notes

¹ Cambodia, Indonesia, Lao PDR, Malaysia, the Philippines, Singapore, Thailand and Vietnam.