Information and Communication Technology, Transportation Infrastructure, and Their Effect on Inward Foreign Direct Investment in the ASEAN
Information and Communication Technology, Transportation Infrastructure, and Their Effect on Inward Foreign Direct Investment in the ASEAN

Summary/Abstract: The purpose of this study is to investigate the roles of information and communication technology (ICT) and transportation infrastructure in influencing inward foreign direct investment (FDI) in the ASEAN for the period from 2000–2018 using panel analysis techniques involving pooled ordinary least squares (OLS), fixed and random effect. Specifically, ICT and transportation infrastructure together with other determinants of FDI such as economic growth, openness, tax barriers, and labor force capacity are applied to analyze their effects on inward FDI. The results of this study are consistent with the literature, whereby macroeconomic factors such as economic growth, trade openness, and the labor force have a positive impact on inward FDI. The results also suggest that ICT has a significantly positive impact on inward FDI in the ASEAN. In terms of transportation infrastructure, road quality is the main factor attracting FDI into ASEAN countries. The results of this study can be used as guidance for policymakers on FDI, and encourage the government to pay greater attention to the development of both transportation infrastructure and ICT. The quality and availability of infrastructure in the host country definitely attracts FDI.

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