The Relationship between Foreign Direct Investment Influx, Economic Growth, and Financial Institutions in ASEAN-6

Made Gitanadya Aryani, Annisa Pratamasari

2018

Abstract

Globalization era has brought about the influx of foreign investment from all over the world, namely foreign direct investment and international portfolio investment. Those investments are assumed to have positive impacts on the invested countries, dut to the transfer of technology and knowledge from developed countries to developing countries. However, previous research stated that it was not always be the case, because FDI influx differs in each country. One of the causes for the different outcomes on economic growth from FDI influx is the development of financial market, such as banking system and stock exchange, in invested countries. The existence of proper financial market in a country marks its readiness to expand FDI even further to aim for higher economic growth. The object of this research is ASEAN members, because Southeast Asia is a dynamically growing region in terms of economy; hence, it attracts FDI influx. ASEAN is also a challenging object in terms of the degree of variability in financial market among its members. Based on ASEAN Stats data, it is illustrated that the amount of FDI flowing to each ASEAN member differ, especially between ASEAN members with financial market and without. This quantitative research employs regression analysis on primary and secondary data related to various macroeconomic variables of ASEAN members to establish the findings. Hence, this research aims to prove that financial market boosts positive impacts of FDI to economic growth among ASEAN members.

Paper Citation

in Harvard Style

Aryani M. and Pratamasari A. (2018). The Relationship between Foreign Direct Investment Influx, Economic Growth, and Financial Institutions in ASEAN-6. In Proceedings of Airlangga Conference on International Relations - Volume 1: ACIR, ISBN 978-989-758-493-0, pages 26-33. DOI: 10.5220/0010272600002309

in Bibtex Style

@conference{acir18,
author={Made Gitanadya Aryani and Annisa Pratamasari},
title={The Relationship between Foreign Direct Investment Influx, Economic Growth, and Financial Institutions in ASEAN-6},
booktitle={Proceedings of Airlangga Conference on International Relations - Volume 1: ACIR,},
year={2018},
pages={26-33},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0010272600002309},
isbn={978-989-758-493-0},
}

in EndNote Style

TY - CONF

JO - Proceedings of Airlangga Conference on International Relations - Volume 1: ACIR,
TI - The Relationship between Foreign Direct Investment Influx, Economic Growth, and Financial Institutions in ASEAN-6
SN - 978-989-758-493-0
AU - Aryani M.
AU - Pratamasari A.
PY - 2018
SP - 26
EP - 33
DO - 10.5220/0010272600002309