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Select FDI Determinants in ASEAN-5 and Their Implications on ASEAN Integration


Southeast Asia is on the brink of history: By the end of 2015, the region will undertake its boldest step yet and start becoming an integrated economic community, opening up financial and trade markets in the 10-member bloc. The free flow of goods and capital will also allow the entry of more investors. However, with only a few months left before the integration, the preparedness of some members of the Association of Southeast Asian Nations (ASEAN) has been put into question. This study examines the five biggest members of ASEAN-Indonesia, Malaysia, the Philippines, Singapore and Thailand on the basis of the factors that attract foreign direct investment (FDI) to their territories. The panel data analysis shows that two variables-corruption perception and the size of the labor force-have a significant impact on FDI in the region, highlighting both the regional group's strengths and weaknesses, which could present both as challenges and opportunities in the upcoming integration.


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