Determinant Factors Affecting the Inflow of Foreign Investment: Case Study of ASEAN Countries
Muhammad Ubaidillah Al Mustofa (a*), Raditya Sukmana (a), Imron Mawardi (a), Sri Herianingrum (a), Tika Widiastuti (a), Dewie Saktia Ardiantono (b)

a) Faculty of Economics and Business, Universitas Airlangga, Surabaya, Indonesia
b) Faculty of Business and Technology Management,
Institut Teknologi Sepuluh Nopember, Surabaya, Indonesia

Abstract

This study analyzes the impact of macroeconomic factors, country risk, and trade on the inflow of foreign direct investment in ASEAN countries. This research is a quantitative research that applies the Data Panel Regression with Fixed Effect. The empirical result shows, the currency exchange rate has a positive and significant influence. A higher value of IDR against USD (depreciation), will increase the inflow of foreign investment. In addition, country risk, economic growth, and inflation do not play an important role in influencing the motivation of foreign investors. Trade is negatively and significantly correlated with foreign investment and this opposes the mainstream theory.

Keywords: Foreign Investment, Country Risk, Trade, Macroeconomics

Topic: Social and Economic Issues

Link: https://ifory.id/abstract-plain/w3QMkxRuqajV

Web Format | Corresponding Author (Muhammad Ubaidillah Al Mustofa)