FOREIGN DIRECT INVESTMENT (FDI) AND GROWTH OF COMPANY’S EXPORT: A CASE STUDY IN ASEAN COUNTRIES
MetadataShow full item record
The amount of FDI which flows to a country usually depends on the amount of output of multinational corporations in the country, or the magnitude of market size possessed by the country, which can be measured through GDP. This study aims to examine factors that affect FDI and export performed by ASEAN companies, particularly in the sector of technology and electronic industry. The economic growth (GDP), exchange rate, interest rate, inflation and population are included as independent variables and the analysis is conducted using panel data approach. This research is conducted by using a data panel, which includes data of macroeconomics and the data of 22 ASEAN companies in the sector of technology and electronics, for the period of 2012-2017. The results showed that interest rate and GDP significantly affect FDI and export. In addition, GDP and population also show a similar magnitude toward FDI; however, there is no meaningful effect on export. On the other hand, the effect of exchange rate on export is shown to be important but not for FDI. The results revealed that GDP, interest rate, inflation, and population are the factors that bring influence on FDI in the ASEAN. The study empirically examined the role of GDP, exchange rate, interest rate, inflation and population on FDI and export performed by companies located in ASEAN in the period of 2012-2017. The study is another empirical examination of the theory of ‘The Output and Market Size Hypothesis.’ This study only focusses on the secondary data from specific sector which probably limit the portray of export of ASEAN. The results imply that interest rate and GDP significantly affect FDI and export. There is possibility that as GDP growth stimulates FDI and export, and in the meantime the expansion of GDP and export boost the GDP growth.