The impacts of corruption and environmental degradation on foreign direct investment: new evidence from the ASEAN+3 countries

Figures & data

Figure 1. Corruption perception index.

Source: countryeconomy.com The Corruption Perception Index scale is from zero (very corrupt) to 100 (Low or no corruption).

Figure 2. FDI inflows in China and ASEAN 1995-2019 US$ Billion).

Source: World Bank

Figure 3. Total CO₂ emission (Mtoe).

Source: countryeconomycom.Vertical Axe. Total CO2 Emission (Mtoe)

Figure 4. Conceptual framework.

Table 1. Selected variables

Variable	Abbreviation	Data Source	Unit
Foreign direct investment	lnFDIit	World Bank	% of GDP
Gross Domestic Product at Constant Price	lnGDPit	World Bank	USD ($)
Corruption perception index	lnCORit	countryeconomy.com	Index
Consumer price index	lnCPIit	World Bank	Index
Trade	lnTRADEit	World Bank	% of GDP
Environmental degradation	lnCO2it	countryeconomy.com	Ktons
Infrastructure	lnINFit	World Bank	Per 100 people

Table 2. Panel unit root tests results

Variables	LLC		IPS
	Level	1^st difference	Level	1^st difference
lnCO2	−2.3950*** (0.0083)	−4.0631**** (0.0000)	1.3388 (0.9097)	−6.6171*** (0.0000)
lnCOR	−0.2598 (0.3975)	−5.7576*** (0.0000)	−0.0219 (0.4913)	−9.7629*** (0.0000)
lnCPI	−4.1380*** (0.0000)	−4.6211*** (0.0000)	−0.2909 (0.3856)	−3.4068*** (0.0003)
lnGDP	0.3928 (0.6528)	−6.3641*** (0.0000)	5.1715 (1.0000)	−7.3417*** (0.0000)
lnFDI	0.8151 (0.7925)	−4.6735*** (0.0000)	−0.6843 (0.2469)	−6.6820*** (0.0000)
lnTRADE	−0.5202 (0.1174)	−6.1274*** (0.0000)	0.8090 (0.7907)	−7.4531*** (0.0000)
lnINF	−6.1176*** (0.0000)	−3.4401*** (0.0003)	−6.3752*** (0.0000)	−3.4573*** (0.0003)

Note: *** and ** show 1% and 5% significance levels, respectively. The probability values are in parentheses. lnCO is the log of CO2 emissions, lnCOR is the log of corruption perception indexes, lnCPI is the log of consumer price index, lnGDP is the log of GDP at constant prices, lnFDI is the log of FDI inflows as a percentage of GDP, lnTRADE is the log of trade openness, and lnINF is the log of infrastructure.

Table 3. Panel co-integration results

	Within Dimension
	Without Trend	With Trend
Panel v-Statistic	−0.4607 (0.6775)	−1.7368 (0.9588)
Panel rho-Statistic	1.0374 (0.8502)	1.6636 (0.9519)
Panel PP-Statistic	−6.0994*** (0.0000)	−5.7712*** (0.0000)
Panel ADF-Statistic	−2.6934** (0.0035)	−1.9648** (0.0247)
	Between Dimension
	Without Trend	With Trend
Group rho-Statistic	2.3909 (0.9916)	2.9973 (0.9986)
Group PP-Statistic	−10.5030*** (0.0000)	−10.6801*** (0.0000)
Group ADF-Statistic	−3.73042*** (0.0001)	−3.6532*** (0.0001)

*** shows the significance levels of 1%

Table 4. Long-run and short-run estimation results

Long Run				Short Run
Variables	Coefficient	Std. Error	t-statistic	Coefficient	Std. Error	t-statistic
lnGDP	1.6606***	0.3391	4.8966	1.6123	4.2291	0.3813
lnCPI	−2.9873***	0.7542	−3.9608	4.7129	2.9699	1.5869
lnCO2	1.2716***	0.3585	3.5466	1.7075	1.2542	1.3614
lnCOR	0.5660**	0.2655	2.1322	−1.1495	0.9027	−1.2734
lnTRADE	−0.9686***	0.2945	−3.2895	1.0568	0.7798	1.3552
lnINF	−0.0928	0.0895	−1.0370	−0.2977	0.3856	−0.7721
ECT	-	-	-	−0.5287***	0.1808	−2.9240

*** and ** show the significance levels of 1% and 5%. lnCO is the log of CO2 emissions, lnCOR is the log of corruption perception indexes, lnCPI is the log of consumer price index, lnGDP is the log of GDP at constant prices, lnFDI is the log of FDI inflows as a percentage of GDP, lnTRADE is the log of trade openness, and lnINF is the log of infrastructure.

Table 5. Short-run country-specific results

Countries	D(lnGDP)	D(lnCOR)	D(lnTRADE)	D(lnCPI)	D(lnINF)	D(lnCO2)
Malaysia	2.9480	−1.0579	3.9301	1.0217	−1.7504	7.4991
Indonesia	22.0137	1.22978	−0.3877	7.4381	0.8901	4.2204
Thailand	−0.1882	−0.4191	−1.1191	12.7860	−0.6107	4.3508
Philippines	−10.1267	−1.4987***	1.8171	9.0633	−0.8418***	−5.4932***
Singapore	8.9188*	−7.6887	0.9957	−13.018	−0.4231*	2.6101
Vietnam	−23.2995	1.7777***	5.4665***	−0.6514	−0.2881***	2.2177**
China	7.7599	−0.3656	0.1374	2.2512	−0.0824	0.4412
South Korea	0.8362	−1.6077***	0.3126	5.3886	−1.5485**	−1.7068
Japan	5.6490	−0.7153**	−1.6414**	18.1372	1.9752	1.2280

Note: *** and ** show significance levels of 1% and 5%. lnCO is the log of CO2 emissions, lnCOR is the log of corruption perception indexes, lnCPI is the log of consumer price index, lnGDP is the log of GDP at constant prices, lnFDI is the log of FDI inflows as a percentage of GDP, lnTRADE is the log of trade openness, and lnINF is the log of infrastructure.