Analysis on the Impact of Economic Globalization on Human Development and Economic Growth in the ASEAN-4

Abstract

Economic globalization has made economies fruitful; however, a few studies argued that its impact on human development is not at par with economic growth’s advancements. With this, the effect and difference of economic globalization in terms of Trade, Foreign Direct Investment (FDI), and Foreign Portfolio Investment (FPI) on Human Development Index (HDI) and Gross Domestic Product (GDP) per capita were examined among the ASEAN-4 nations, namely, Indonesia, Malaysia, Philippines, and Thailand conjointly from 1990 to 2019. Multiple regression was used to estimate the parameters and significance of the models. Results have proved that the predictors, collectively, have a positive and statistically significant effect on GDP and the HDI. However, the data showed that linear regression of GDP per capita at 51.21% has more variation than HDI at 35.95%, which could mainly be due to that human development is highly influenced by other factors such as demand political freedom and prioritization of human rights, while the preferred subset still has the three variables altogether. Yet there were sub predictors towards GDP per capita that showed a partial effect except for FDI and FDI+FPI. This might be caused by its unidirectionality and volatility in investing.