THE INFLUENCE OF ECONOMIC GROWTH, TRADE OPENNESS, AND POLITICAL FRAGILITY ON FOREIGN DIRECT INVESTMENT IN ASEAN ON PERIOD 2018-2020

Abstract

This research aims to analyze the influence of economic growth, trade openness, and political fragility on Foreign Direct Investment (FDI) in ASEAN on Period 2018- 2020. The sample consists of 11 ASEAN countries (Brunei, Burma (Myanmar), Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam). Quantitative data are obtained from World Bank and The Fund for Peace website and analyzed by panel data regression method with Random Effect Model, processed by E-Views. This research finds that economic growth and political fragility has no influence on FDI; but trade openness has a positive influence on FDI. These findings support electic theory which assumes that trade openness often creates location advantages, especially when a country has easier access to global markets. Countries with open trade policies can attract FDI because foreign companies see the benefits of access to broader export markets.