All books bought on the website can only be read on the app. Download Jackobian to have access to your materials
The importance of regional integration in stimulating foreign direct investment cannot be
overemphasized. With a special focus on the ASEAN countries, this research paper investigates the
role of regional integration in attracting foreign direct investment. We bring a novelty to this paper
by dividing foreign direct investment into Inter-and Intra-ASEAN to see if both are determined by
the same set of factors. If economic integration drives intra-ASEAN FDI we would expect such FDI
to be unrelated to macroeconomic fundamentals in each country, while we would expect Extra-
ASEAN FDI to be determined by macroeconomic fundamentals. We employed panel data model in
the analyses and the findings show that FDI from rest of the world are determined by
macroeconomic fundamentals especially market size (GDP) and exchange rate, while inter-ASEAN
FDI is not significantly related to macroeconomic fundamentals but depends on previous
investments in the region. This implies most investments in ASEAN from ASEAN are motivated by
economic integration.
