An Econometric Analysis of the Behavior of Investment Rate in Selected Developing Countries

This thesis aims to investigate the relationship between economic variables, e.g., inflation rate, interest rate, trade openness, growth rate of GDP with the investment function in South East Asian Nations (ASEAN) e.g., Malaysia, Philippines, Singapore, and Thailand from 1976 to 2013. To meet this end, the panel regression analysis and OLS methods are used to investigate the effects of economic variables on the domestic investment with respect to each country. Additionally, the effects of economic variables in the group of countries in form of the panel data is used to find the relationship between of the economic variables is analyzed. The result of this investigation revealed that the relationship between the real interest rate and domestic investment (I/GDP) is negative. Similarly, for the I/GDP and inflation rate a negative relationship was obtained. However, the trade openness and growth rate had a positive correlation.