THE EFFECT OF EASE OF DOING BUSINESS (EODB) AND CORRUPTION PERCEPTIONS INDEX (CPI) ON FOREIGN DIRECT INVESTMENT (FDI) IN ASEAN


Firdaus Firdaus(1*), Imam Fakhruddin(2), Kheqal Fitradinata(3), Riyan Hidayat(4)

(1) Manajemen Keuangan Syariah, Sekolah Tinggi Agama Islam Negeri Bengkalis, Indonesia
(2) Manajemen Keuangan Syariah, Sekolah Tinggi Agama Islam Negeri Bengkalis, Indonesia
(3) Manajemen Keuangan Syariah, Sekolah Tinggi Agama Islam Negeri Bengkalis, Indonesia
(4) Department of Science and Technical Education, University Putra Malaysia, Malaysia
(*) Corresponding Author

Abstract


The background of this study is the instability of foreign investment in Southeast Asia due to declining corporate revenues and the Covid-19 pandemic, which has caused economic uncertainty and delayed investments by multinational companies. This study aims to examine the influence of the Ease of Doing Business (EoDB) and the Corruption Perception Index (CPI) on Foreign Direct Investment (FDI) in ASEAN. The research employs Structural Equation Modeling using Partial Least Square (SEM-PLS 4) software. The population in this study includes all countries in the Southeast Asian region, with a total sampling or census approach. The results indicate that the Ease of Doing Business does not affect Foreign Direct Investment. This is largely due to the low EoDB index scores in most ASEAN countries. In contrast, the Corruption Perception Index has a positive and significant effect on Foreign Direct Investment, suggesting that foreign investors have greater confidence to invest and feel that their substantial funds will be safer. The implications of this study suggest that ASEAN governments must enhance the investment climate by implementing regulatory reforms that promote the Ease of Doing Business and reduce corruption levels. These efforts are expected to improve regional competitiveness and attract more foreign investment, ultimately accelerating economic growth and infrastructure development in the region.

Keywords


EoDB, CPI dan FDI

Full Text:

PDF

References


Adiyudawansyah, A., & Santoso, D. B. (2012). Analisis Faktor-Faktor Yang Mempengaruhi Foreign Direct Investment Di Lima Negara ASEAN. Jurnal. Malang: Universitas Brawijaya.

Afif, F. Y. (2022). Daya Saing dan Foreign Direct Investment. Jurnal Ekonomi Pembangunan, 11(1), 52–59.

Alfaro, L., & Chauvin, J. (2020). Foreign direct investment, finance, and economic development. Faculty & Research, 1, 231–258.

Bin Nurdin, M. N., Hamzah, M., & Sofilda, E. (2023). Is the World Bank Ease of Doing Business Ratings a Determinant of FDI in a Country? Analyzing the Effects of EODB Indicators of FDI according to Countries’ Income Levels. OIDA International Journal of Sustainable Development, 16(01), 26–34.

Christianingrum, R. (2023). Korupsi dan Penanaman Modal Asing: Perbaikan Kelembagaan. Jurnal Budget: Isu Dan Masalah Keuangan Negara, 8(2), 332–353.

Contractor, F. J., Dangol, R., Nuruzzaman, N., & Raghunath, S. (2020). How do country regulations and business environment impact foreign direct investment (FDI) inflows? International Business Review, 29(2), 101640.

Corcoran, A., & Gillanders, R. (2015). Foreign direct investment and the ease of doing business. Review of World Economics, 151, 103–126.

Edo, S., Osadolor, N. E., & Dading, I. F. (2020). Growing external debt and declining export: The concurrent impediments in economic growth of Sub-Saharan African countries. International Economics, 161, 173–187.

Erdoğan, S., Yıldırım, D. Ç., & Gedikli, A. (2020). Natural resource abundance, financial development and economic growth: An investigation on Next-11 countries. Resources Policy, 65, 101559.

Fazira, D. R., & Cahyadin, M. (2018). The impact of interest rate, corruption perception index, and economic growth on foreign direct investment in ASEAN-6. Jurnal Keuangan Dan Perbankan, 22(4), 707–713.

Firdaus, F., Hambali, R., & Ziani, A. (2023). ANALISIS KOMPARATIF KINERJA KEUANGAN BANK SYARIAH DI KAWASAN ASIA TENGGARA. Inspirasi Ekonomi: Jurnal Ekonomi Manajemen, 5(3), 175–192.

Hafilah, E. N., & Ahmad, M. (2022). The Effect of Ease of Doing Business, Market Size and Political Stability on Foreign Direct Investment in Southeast Asia. Journal of Curriculum Indonesia, 5(1), 54–62.

Iksan, M., & Konishi, T. (2023). The Determining Factors of Foreign Direct Investment (FDI) Inflows: Empirical Studies from the Southeast Asian Countries. JASSP, 3(1), 28–44.

Irawan, A., & Alamsyah, H. (2021). The COVID-19’s economic crisis and its solutions: A literature review. Etikonomi, 20(1), 77–92.

Ishikawa, K. (2021). The ASEAN Economic Community and ASEAN economic integration. Journal of Contemporary East Asia Studies, 10(1), 24–41.

Martua, A., & Ginting, I. T. (2023). The Effect of Ease of Doing Business Indicators on Investment Interest. Monas: Jurnal Inovasi Aparatur, 5(2), 108–121.

Mohsin, M., Ullah, H., Iqbal, N., Iqbal, W., & Taghizadeh-Hesary, F. (2021). How external debt led to economic growth in South Asia: A policy perspective analysis from quantile regression. Economic Analysis and Policy, 72, 423–437.

Moustafa, E. (2021). The relationship between perceived corruption and FDI: a longitudinal study in the context of Egypt. Transnational Corporations Journal, 28(2).

Mundakkad, P. (2021). Ease of doing business and foreign direct investment inflows: Evidence from emerging economies. Economic Research Guardian, 11(1), 47–63.

Musyarof, Z., & Qomari, I. N. (2023). Pengaruh Pertumbuhan Ekonomi terhadap Emisi Gas Karbon Dioksida (CO2): Data Panel Negara ASEAN Tahun 2000-2019. Ecoplan, 6(2), 87–99.

Nguyen, H. T., & Darsono, S. (2022). The impacts of tax revenue and investment on the economic growth in Southeast Asian countries. Journal of Accounting and Investment, 23(1), 128–146.

OECD. (2021). Middle East and North Africa Investment Policy Perspectives. OECD Publishing. https://books.google.co.id/books?id=HZAmEAAAQBAJ

REHMAN, M. Z., KHAN, M. N., & ASLAN, H. (2022). Does Islamicity affect economic growth? Evidence from OIC, high, middle, and low-income countries. Hamdard Islamicus, 45(3).

Romadhona, N. A. (2016). Pengaruh Inflasi, produk domestik bruto, corruption perception index, dan indeks harga saham terhadap foreign direct investment di Indonesia periode (2005-2014). Jurnal Ilmu Manajemen, 1(5), 42–54.

Rong, S., Liu, K., Huang, S., & Zhang, Q. (2020). FDI, labor market flexibility and employment in China. China Economic Review, 61, 101449.

Shaari, M. S., Esquivias, M. A., Ridzuan, A. R., Fadzilah Zainal, N., & Sugiharti, L. (2022). The impacts of corruption and environmental degradation on foreign direct investment: New evidence from the ASEAN+ 3 countries. Cogent Economics & Finance, 10(1), 2124734.

Shaheen, F., Sohail, M., & Nasir, A. (n.d.). IMPLICATION OF THE EASE OF DOING BUSINESS FOR FOREIGN DIRECT INVESTMENT: A PANEL DATA ANALYSIS OF ASIAN COUNTRIES. Global & Local Economic Review, 27(1), 85.

Surya, B., Menne, F., Sabhan, H., Suriani, S., Abubakar, H., & Idris, M. (2021). Economic growth, increasing productivity of SMEs, and open innovation. Journal of Open Innovation: Technology, Market, and Complexity, 7(1), 20.

Zakiyyah, N. A. A., Lubis, F. R. A., & Ainy, R. N. (2024). The Effect Of Macroeconomic, Institutional And Corruption Variables On FDI In Asean Countries. Journal of Economic, Bussines and Accounting (COSTING), 7(3), 5673–5685.




DOI: https://doi.org/10.15575/fjsfm.v5i2.34965

Refbacks

  • There are currently no refbacks.


Copyright (c) 2024 Firdaus; Imam Fakhruddin; Kheqal Fitradinata; Riyan Hidayat

 
 
 Lisensi Creative Commons