The Deterministic Elements of FDI to ASEAN Countries: The Relationship between FDI and Macroeconomic Variables

Abstract

This article examines the deterministic elements of FDI (foreign direct investment) flows into ASEAN countries. It uses a panel data in ASEAN countries and US to analyze the relationship between FDI into ASEAN and macroeconomic variables. Domestic (ASEAN) economic growth, domestic prices in ASEAN and US prices promote FDI into ASEAN. On the other hand, the relationships between FDI volatility and domestic GDP, and the FDI volatility and US price, are not found. Rises in domestic prices increase FDI volatility.