Determinants of FDI in Selected Asian Countries

This thesis aims to examine the determinants of foreign direct investment (FDI) in 20 selected Asian countries in the time period of 2013 to 2017 by using panel data model. Fixed and random two types of panel data techniques have used during the analysis for the classical eight determinants of FDI, to see whether they are also relevant in the case of Asian countries. The determinants tested are GDP as representative of the market size, GDP per capita, labor force, inflation as macroeconomic stability, fuel exports as natural resources, domestic credit to private sectors as financial development, trade openness and economic growth rate. The findings show that economic growth, GDP, trade openness and labor force are the significant determinants of FDI in the sample Asian countries. While, GDP per capita, inflation, fuel exports, domestic credit to private sectors have no significant impact on FDI. Based on these results, policy recommendations are put forward to the 20 Asian countries. In order to increase FDI, additional improvements should be made in GDP, labor force, trade openness and economic growth. Keywords: FDI, GDP, GDP per capita, trade openness, fuel exports, labor force, economic growth, inflation, Asian countries