Investment facilitation and its spatial impact on foreign direct investment in ASEAN

Abstract

Investment facilitation and foreign investment are of great significance to regional economic development. This study takes the investment facilitation of ten ASEAN countries as the research object, selects eight relevant indicators on investment facilitation from the 2014-2019 World Bank Doing Business report, and quantitatively assesses the investment facilitation of ten ASEAN countries based on the hierarchical analysis method. Based on this, a spatial panel data econometric model of the impact of investment facilitation on FDI in ten ASEAN countries is constructed After constructing the investment facilitation model, namely hierarchical analysis, the investment facilitation scores of ASEAN countries are obtained. Then, the relationship between FDI and investment facilitation scores are investigated using the spatial panel regression analysis. The dependent variable is the FDI of ASEAN countries from 2014 to 2019 and the independent variable is the investment facilitation score of ASEAN countries derived from the model. The explanatory variables include the three indicators of GDP, capital utilization rate, and manpower utilization rate of each ASEAN country per year, and the final regression equation is obtained, which in turn verifies the fit of this study and thus provides supporting evidence for the validity of this research. The results reveal that the level of investment facilitation in the ten ASEAN countries shows an increasing trend from 2014-2019. This indicates that the marketmechanism in the ASEAN region is improving with economic development, and the countries continue to improve the level of investment facilitation in order to attract the support of international capital and make it easier for international capital to invest and build in the country. The higher the economic development of the region, the higher the level of investment facilitation.