Determinants of FDI attractiveness: Evidence from ASEAN-7 countries

Figures & data

Table 1. Variables description

Variables	Measurement	Source
FDI	Logarit of the annual net FDI inflows	WDI, IMF
FRE	Index of economic freedom	Heritage
GDPpc	Logarit of real GDP per capita	WDI
INF	Consumer price index	WDI
POL	Political stability	WGI
POPg	Annual population growth rate	WDI
TAX	Tax revenue as a percentage of GDP as proxy of tax burden	ADB, WDI

Table 2. Summary statistics

	FDI	GDPpc	INF	POPg	POL	FRE	TAX
Mean	9.297	3.192	6.943	1.477	−0.448	56.814	13.762
Standard Error	0.060	0.035	1.085	0.042	0.058	0.682	0.287
Standard Deviation	0.746	0.437	13.464	0.522	0.718	8.465	3.557
Kurtosis	0.849	−0.890	49.382	0.312	−0.995	0.207	0.095
Skewness	−1.061	0.006	6.529	0.066	−0.453	−0.688	0.246
Minimum	6.649	2.395	−1.710	0.252	−2.118	33.500	5.798
Maximum	10.400	4.049	125.272	3.021	0.552	73.800	22.401
Observations	154	154	154	154	154	154	154

Table 3. Pearson correlation matrix

	FDI	GDPpc	INF	POPg	POL	FRE	TAX
FDI	1.00
GDPpc	0.70***	1.00
INF	−0.29**	−0.34***	1.00
POPg	−0.38***	−0.24*	0.08	1.00
POL	0.03	0.11	−0.07	0.01	1.00
FRE	0.53***	0.68***	−0.39***	0.01	−0.1	1.00
TAX	0.49***	0.32***	−0.14	−0.38***	0.39***	0.04	1.00

Note. *p < 0.1; **p < 0.05; ***p < 0.01

Table 4. Stationary tests

Variables	Levin-Lin-ChuT-statistic	Harris-TzavalisZ-statistic	Fisherchi-squared
FDI	−6.0553***	−5.2447***	37.3021 ***
GDPpc	−6.0717***	−0.0396	5.6275**
POPg	−11.2222***	3.2557	61.5799***
POL	−5.8482**	0.9033	12.0298**
TAX	−8.0642***	−1.7805**	13.9973*
INF	−8.3056***	−7.3922***	64.0335***
FRE	−4.9239*	0.9238	18.5912*

Note. *p < 0.1; **p < 0.05; ***p < 0.01

Table 5. OLS and FGLS estimations

	Pooled		SUR
	Co-eff	Std.err	Co-eff	Std.err
GDPpc	0.704***	0.132	0.826***	0.116
POPg	−0.228***	0.081	−0.212***	0.066
POL	−0.120**	0.059	−0.041**	0.047
TAX	0.069***	0.013	0.050***	0.009
INF	−0.001	0.003	−0.002	0.002
FRE	0.020***	0.007	0.012***	0.004
Constant	5.240***	0.398	5.620***	0.404
Observations	154		154
R2	0.633		0.277
Adjusted R^2	0.618		−0.010
F Statistic (df = 6; 147)	42.226***

Note. *p < 0.1; **p < 0.05; ***p < 0.01

Table 6. Fixed-effects and GMM estimation results

	(1)	(2)	(3)	(4)	(5)
GDPpc	1.460***	1.427***	1.498***	1.426***	1.444*
	(0.130)	(0.131)	(0.135)	(0.142)	(1.023)
POPg	−0.197*	−0.214*	−0.225**	−0.201*	−2.816*
	(0.114)	(0.114)	(0.113)	(0.114)	(1.233)
POL	−0.144**	−0.129**	−0.135**	−0.124**	−3.861**
	(0.056)	(0.057)	(0.056)	(0.056)	(1.421)
TAX		0.025*	0.024*	0.020	0.378***
		(0.014)	(0.014)	(0.014)	(0.071)
INF			0.004*	0.004**	−0.031
			(0.002)	(0.002)	(0.018)
FRE				0.011	0.109***
				(0.007)	(0.010)
Observations	154	154	154	154	154
R2	0.601	0.610	0.619	0.625
Adjusted R^2	0.576	0.582	0.590	0.594
F Statistic	72.25***	55.83***	46.18***	39.24***
Hansen J (p-value)					0.521
AR(2) (p-value)					0.832

Note. Regressions 1–4 report the estimation results by applying Fixed effect method. Regression 5 reports the estimation results by applying System GMM method. *p < 0.1; **p < 0.05; ***p < 0.01

Table 7. Sub-period estimations

	(1996–2008)		(2009–2019)
GDPpc	1.698***	(0.285)	2.182***	(0.624)
POPg	0.311**	(0.137)	0.419	(0.459)
POL	0.067	(0.079)	−0.188	(0.237)
TAX	−0.007	(0.021)	0.002	(0.037)
INF	0.006**	(0.002)	0.014	(0.017)
FRE	0.009	(0.009)	0.052**	(0.022)
Observations	91		63
R2	0.367		0.403
Adjusted R^2	0.270		0.259
F Statistic	7.535*** (df = 6; 78)		5.619*** (df = 6; 50)

Note. *p < 0.1; **p < 0.05; ***p < 0.01