Factors influencing the inflow of foreign direct investment on the example of ASEAN+3 countries
DOI:
https://doi.org/10.52123/1994-2370-2022-944Keywords:
foreign direct investment, ASEAN 3 countries , Kazakhstan, effective public administration, attracting FDIAbstract
Recent empirical studies have shown that foreign direct investment (FDI) is expected to be closely linked to democratic governance, political stability and favorable macroeconomic conditions of the host country. The aim is to analyze the importance of effective management as a factor of attractiveness of the inflow of FDI on the example of the ASEAN+3 countries (Korea, China, Japan).
To determine the impact of effective governance on FDI inflows in the ASEAN+3 countries registered in the period 1996-2018, the Global Governance Indicators (WGI) are used to study the impact of effective governance on FDI inflows. We have investigated the possibility of applying this methodology for the Republic of Kazakhstan.
Our main conclusions can be summarized as follows: political stability, the rule of law, as well as voting rights and accountability have a statistically significant impact on FDI inflows to ASEAN+3 countries, especially to the Korean economy. Moreover, the growth of gross domestic product (GDP) continues to have a positive impact. However, the quality of regulation, the effectiveness of government and the fight against corruption, although no less important, are insignificant for attracting FDI inflows. The key conclusion is that effective governance has a significant impact on FDI inflows. In order to attract FDI to non-sectoral sectors of the economy of Kazakhstan, a more active role of the state is needed, which should primarily be aimed at the stability of legislation, regulatory rules, subsidies, etc.