Economic Freedom, FDI, Inflation and Economic Growth in East and Southeast Asian Countries: A Panel Data Analysis

Abstract

This study is panel data that aims to analyze the effect of Economic Freedom, Foreign Direct Investment, and Inflation on Economic Growth in East Asian and Southeast Asian countries from 2000 to 2020. We find that simultaneously, Economic Freedom, Foreign Direct Investment, and Inflation positively affect Economic Growth. The proportion of the influence of all independent variables on the dependent variable is 16.03 percent. We also obtain partial results that Economic Freedom and Foreign Direct Investment positively influence Economic Growth. Meanwhile, Inflation negatively affected Economic Growth in East Asian and Southeast Asian countries from 2000 to 2020. These results have important implications for the governments of East and Southeast Asian countries, especially in responding to Inflation that impacts Economic Growth. Policies aimed at reducing the impact of Inflation on Economic Growth must identify the factors causing Inflation and consider the increase in production costs.