The impact of macroeconomic variables on foreign direct investment (fdi) in asean-5 countries

The past decades, the ASEAN has grown to be an important economic player. The foreign direct investment (FDI) inflows play an important role in achieving ASEAN’s economic development. The ASEAN-5 is the biggest consumer market of the world after China and India. Hence, this study aims to investigate...

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Main Author:	Chong, Fong Yi
Format:	Thesis
Language:	English English
Published:	2023
Subjects:	HG4538 Foreign investments
Online Access:	https://eprints.ums.edu.my/id/eprint/40533/1/24%20PAGES.pdf https://eprints.ums.edu.my/id/eprint/40533/2/FULLTEXT.pdf
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spelling	my-ums-ep.405332024-09-24T04:32:33Z The impact of macroeconomic variables on foreign direct investment (fdi) in asean-5 countries 2023 Chong, Fong Yi HG4538 Foreign investments The past decades, the ASEAN has grown to be an important economic player. The foreign direct investment (FDI) inflows play an important role in achieving ASEAN’s economic development. The ASEAN-5 is the biggest consumer market of the world after China and India. Hence, this study aims to investigate the impact of macroeconomic variables on FDI inflows in ASEAN-5 countries (Indonesia, Malaysia, Philippines, Singapore, and Thailand) for the period 1970-2018. Using five explanatory variables (market size, inflation rate, trade openness, exchange rate and oil prices), this study tries to investigate the factors that determine FDI inflows to the studied countries. To achieve this objective, this study will utilise Autoregressive Distributed Lag (ARDL) approaches to investigate the long run relationship between the explanatory variables and FDI inflows. Based on a comparative discussion, the study results will demonstrate what are the common factors will attract or discourage FDI inflows into the ASEAN-5 countries. The findings revealed that there is a mixed results in terms of the main determinants of FDI as well as the direction of relationship. Market size as measured by Gross Domestic Product (GDP), inflation and exchange rates are significant in most of the sample countries. Meanwhile, only in Thailand the trade openness has a significant relationship with FDI whilst oil price has a significant relationship with FDI in the Philippines. Further analysis revealed that GDP has a positive relationship with FDI implying that the bigger size of the country market, the higher the FDI inflows into the country. Meanwhile, inflation rate and exchange rate showed a mixed direction of relationship among the sample countries. This study has significant implications for body of knowledge and practitioners. The findings in the study help to further understand the multiple factors influencing FDI in ASEAN-5 countries which has not been extensively investigated. Meanwhile, policymakers from the sample countries would be able to understand the importance of the main determinants of FDI inflows to their respective countries. Hence, steps could be taken to utilize the factors to attract the FDI inflows. The insignificant of trade openness and oil price as FDI drivers in most of sample countries has opened new insight on measurement of the variables and methods of analysis for future research. 2023 Thesis https://eprints.ums.edu.my/id/eprint/40533/ https://eprints.ums.edu.my/id/eprint/40533/1/24%20PAGES.pdf text en public https://eprints.ums.edu.my/id/eprint/40533/2/FULLTEXT.pdf text en validuser masters Universiti Malaysia Sabah Faculty of Business, Economics and Accountancy
institution	Universiti Malaysia Sabah
collection	UMS Institutional Repository
language	English English
topic	HG4538 Foreign investments
spellingShingle	HG4538 Foreign investments Chong, Fong Yi The impact of macroeconomic variables on foreign direct investment (fdi) in asean-5 countries
description	The past decades, the ASEAN has grown to be an important economic player. The foreign direct investment (FDI) inflows play an important role in achieving ASEAN’s economic development. The ASEAN-5 is the biggest consumer market of the world after China and India. Hence, this study aims to investigate the impact of macroeconomic variables on FDI inflows in ASEAN-5 countries (Indonesia, Malaysia, Philippines, Singapore, and Thailand) for the period 1970-2018. Using five explanatory variables (market size, inflation rate, trade openness, exchange rate and oil prices), this study tries to investigate the factors that determine FDI inflows to the studied countries. To achieve this objective, this study will utilise Autoregressive Distributed Lag (ARDL) approaches to investigate the long run relationship between the explanatory variables and FDI inflows. Based on a comparative discussion, the study results will demonstrate what are the common factors will attract or discourage FDI inflows into the ASEAN-5 countries. The findings revealed that there is a mixed results in terms of the main determinants of FDI as well as the direction of relationship. Market size as measured by Gross Domestic Product (GDP), inflation and exchange rates are significant in most of the sample countries. Meanwhile, only in Thailand the trade openness has a significant relationship with FDI whilst oil price has a significant relationship with FDI in the Philippines. Further analysis revealed that GDP has a positive relationship with FDI implying that the bigger size of the country market, the higher the FDI inflows into the country. Meanwhile, inflation rate and exchange rate showed a mixed direction of relationship among the sample countries. This study has significant implications for body of knowledge and practitioners. The findings in the study help to further understand the multiple factors influencing FDI in ASEAN-5 countries which has not been extensively investigated. Meanwhile, policymakers from the sample countries would be able to understand the importance of the main determinants of FDI inflows to their respective countries. Hence, steps could be taken to utilize the factors to attract the FDI inflows. The insignificant of trade openness and oil price as FDI drivers in most of sample countries has opened new insight on measurement of the variables and methods of analysis for future research.
format	Thesis
qualification_level	Master's degree
author	Chong, Fong Yi
author_facet	Chong, Fong Yi
author_sort	Chong, Fong Yi
title	The impact of macroeconomic variables on foreign direct investment (fdi) in asean-5 countries
title_short	The impact of macroeconomic variables on foreign direct investment (fdi) in asean-5 countries
title_full	The impact of macroeconomic variables on foreign direct investment (fdi) in asean-5 countries
title_fullStr	The impact of macroeconomic variables on foreign direct investment (fdi) in asean-5 countries
title_full_unstemmed	The impact of macroeconomic variables on foreign direct investment (fdi) in asean-5 countries
title_sort	impact of macroeconomic variables on foreign direct investment (fdi) in asean-5 countries
granting_institution	Universiti Malaysia Sabah
granting_department	Faculty of Business, Economics and Accountancy
publishDate	2023
url	https://eprints.ums.edu.my/id/eprint/40533/1/24%20PAGES.pdf https://eprints.ums.edu.my/id/eprint/40533/2/FULLTEXT.pdf
_version_	1811770525631905792

The impact of macroeconomic variables on foreign direct investment (fdi) in asean-5 countries

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