Analysis of Foreign Direct Investment in ASEAN Countries

FDI has played a role of fundamental importance for developing countries, changing not only the economy but also having a significant impact on social factors. The following research analyzes the impact and effects that FDI had in the period between 2003 and 2017 in the member countries of the ASEAN group. The countries analyzed have seen benefits in terms of capital resources and technological know-how, with flows coming not only from neighboring industrialized countries, such as Japan or China but also from more distant countries such as the United States or European countries (Diaconu 2014) The aim of the thesis will therefore be to build a discrete economic model of the Conditional Logit type, to understand the main reason and determinants leading Foreign investments in ASEAN Countries. To move towards the construction of the model, the research will be structured in the following way. Initially an overview of the main characteristics, definitions and history on FDI and Multinational Enterprise will be provided, followed by a meta-analysis on the 10 members countries of the ASEAN group, to better understand what will be the most significant determinants for each country. An analytical study of the trends and evolution of FDI in the area will be given, with the use of data provided by the World Bank, which will cover both a general analysis of flows and the trend at the industry level. In the last two chapters the most significant determinant impacting on FDI flow will be defined, so we’ll be able to move on the construction of the econometric model, assessing the choice of FDI location among 8 ASEAN countries chosen for the analysis. Necessary conclusions will be finally drawn based on the achieved results by the study carried out.