Quantitative analysis reveals the role of human development and corruption perception indices in attracting foreign investment in ASEAN.
This study explains the attractiveness of ASEAN as a friendly region for foreign investment by looking at several factors that are variables to attract foreign investors to invest in ASEAN. These factors include the variables of the corruption perception index, the democracy index, the human development index and the crime index against foreign direct investment in 9 ASEAN countries in 2013-2022. The existence of foreign direct investment in a country can be useful as state revenue from tax sources, as well as useful for technology transfer, skills transfer, and increasing the level of national income in the economy. This study uses a quantitative method with secondary data and data collection through the World Bank, Transparency International, the United Nations Development Programme (UNDP), Numbeo, and The Economist Intelligence Unit. This study also uses panel data regression with the best model approach, namely the Random Effect Model (REM), to find out how much influence independent variables such as the corruption perception index, democracy index, human development index, and crime index on variables tied to foreign direct investment. However, the results of the t-test show that there are only two independent variables that have a significant effect on foreign direct investment, namely the human development index variable and the corruption perception index. The results of this study contribute to enriching the discourse for countries in ASEAN to attract foreign investment in investing in their countries.
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Royali et al. (2025) studied this question.
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