Kantate Novita Sari Hutabarat, 7111417076 (2021) THE EFFECT OF DEMOCRACY INDEX AND EASE OF DOING BUSSINES TOWARDS FOREIGN DIRECT INVESTMENT IN EIGHT ASEAN COUNTRIES. Under Graduates thesis, Universitas Negeri Semarang.

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Abstract

FDI is one of the internatinal financing that is beneficial for a country to accelerate the economic growth, especially for developing countries such as several countries in ASEAN. ASEAN has become an attractive region as an investment destination. Since the economic crisis in 1977-1988 FDI inflows to ASEAN has increased almost four times even when global FDI got decreased. However, during the 2008 economic crisis, there was a decline in FDI inflows which caused the decline in percentage of ASEAN FDI to global FDI. The decline in FDI inflows that occurred in 2015 also affected ASEAN's share of FDI in the global. In other hand, the factors that affect FDI in 8 ASEAN countries are certainly different, and the gap in these factors also affect the position of FDI ASEAN in the global market. This study was conducted to examine the factors that influence FDI in 8 ASEAN countries. The type of data used in this study is secondary data. The research method used panel data regression using annual time series data covering the period 2014 to 2019 with cross countries data of 8 ASEAN countries consisting Indonesia, Cambodia, Lao PDR, Myanmar, Malaysia, Philippines, Thailand, and Vietnam. The variable used in this study is Democracy, Ease of Doing Business, GDP Per Capita, Economic Freedom and Inflation.The study finds that Democracy relates positively and insignificant on FDI, 'Ease of Doing Business relates positively and significantly on FDI, GDP Per Capita has a positive effect and statiscally significant on FDI, Economic Freedom has negative effect and statiscally significant on FDI, Inflation has a positive and statiscally significant on FDI.

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