Published date: May 03 2024

Journal Title: KnE Social Sciences

Issue title: 8th Sriwijaya Economics, Accounting, and Business Conference (8th SEABC 2023)

Pages: 20–32

DOI: 10.18502/kss.v9i14.16090

Arif Darmawanarif.darmawan@feb.unila.ac.idDepartment of Economics Development, University of Lampung

Dedy YuliawanDepartment of Economics Development, University of Lampung

Neli AidaDepartment of Economics Development, University of Lampung

Fakhri Rizal HusainDepartment of Economics Development, University of Lampung

ASEAN as a region has a great economic potential, which explains the large interest in terms of investment in the region. The ASEAN Economic Community (AEC) cooperation program is also a milestone in increasing foreign investment in ASEAN. This study uses a quantitative approach, with the subject of this research being 10 ASEAN countries in 2015–2021. The dependent variable used in this study is foreign direct investment, and the independent variables are government effectiveness, political stability, trade openness, and the workforce. The data in this study comes from the world bank. The analytical method applied in this study is the panel data regression analysis method. Based on the research results, it can be concluded that trade openness and labor force had a positive and significant impact on foreign direct investment in 10 ASEAN countries in 2015–2021. At the same time, government effectiveness and political stability had a positive but insignificant effect. The results of simultaneous testing show that government effectiveness, political stability, trade openness, and the workforce influenced foreign direct investment in 10 ASEAN countries in 2015–2021. The government can use this study in determining foreign investment policies, especially those related to maintaining a stable investment climate.

Keywords: ASEAN, foreign direct investment, government effectiveness, labor force, political stability, trade openness

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