THE IMPACT OF TAX CUT ON FOREIGN DIRECT INVESTMENT: A CASE STUDY IN SOUTHEAST ASIAN COUNTRIES

INFO ARTHA ◽  
2020 ◽  
Vol 4 (1) ◽  
pp. 13-27
Author(s):  
Rusman Affandi Nasution
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Trade Openness ◽  
Control Variable ◽  
Fixed Effect Model ◽  
Southeast Asian ◽  
Gdp Growth ◽  
Asian Countries ◽  
The Impact ◽  
Southeast Asian Countries

In this paper, we have examined the impact of tax cut on foreign direct investment (FDI) in Southeast Asian countries as a response to the debatable issue of the relationship between tax cut policy and FDI. We use corruption perception index and government effectiveness as the control variable, as well as other economic and demographic variables such as GDP growth, tax revenue, inflation, unemployment and population growth. Using Fixed Effect Model on panel data for a period of 1997-2016 adopted from World Bank, UNCTAD, and various websites, our findings suggest that in Southeast Asian countries, even though corporate tax cut policy gives a negative effect on FDI, this tax cut policy is not the main factor that induce investors. It is trade openness and GDP growth which become the reasons for investors to invest in this region. Moreover, the effect of government performance has played pivotal role in attracting FDI inflows.

scholarly journals The Impact of Foreign Direct Investment, Capital Formation, Inflation, Money Supply and Trade Openness on Economic Growth of Asian Countries

2020 ◽  
Vol 2 (1) ◽  
pp. 25-34
Author(s):  
Xiuyun Yang ◽  
Muhammad Nouman Shafiq
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Money Supply ◽  
Direct Investment ◽  
Fixed Effects ◽  
Trade Openness ◽  
Capital Formation ◽  
Fixed Effects Model ◽  
Asian Countries ◽  
The Impact

Economic growth is currently an essential phenomenon for emerging countries worldwide and has gained the researchers' intentions. Thus, the current study aims to examine the role of foreign direct investment (FDI), capital formation, inflation, money supply, and trade openness on the economic growth of Asian countries. The data has been extracted from the twenty emerging Asian countries from 2007 to 2018 using the most popular database named World Development Indicators (WDI). The fixed-effects model, along with the robust standard error, has been used for checking the impact of predictors on the economic growth of Asian countries. The results revealed that the predictors such as FDI, capital formation, money supply, and trade openness have positive association with economic growth, while inflation has a negative association with the economic growth of Asian countries. These findings are suitable for the new arrivals who want to examine this area in the future and for the regular traders who want to develop policies related to economic growth.

scholarly journals BASE EROSION, PROFIT SHIFTING (BEPS) AND TAX REVENUE: ANALYSIS IN SOUTHEAST ASIAN COUNTRIES

2020 ◽  
Vol 1 (35) ◽  
pp. 1-8
Author(s):  
Kien Trung Tran ◽  
Mot Van Muoi Huynh
Keyword(s):  
Multinational Corporations ◽  
Direct Investment ◽  
Southeast Asian ◽  
Tax Revenue ◽  
Asian Countries ◽  
Profit Shifting ◽  
Tax Havens ◽  
Asean Countries ◽  
The Impact ◽  
Southeast Asian Countries

This paper analyzes the impact  of base erosion and profit shifting (BEPS)on tax revenue in Southeast Asian countries for the period of 2012-2017. ASEAN countries are mostly developing countries with  little experience dealing with the aggressive tax strategies of multinational corporations (MNEs). Accordingly, measuring the impact of BEPS on tax revenue in Southeast Asian countries is essential and urgent. Specifically, this paper measures BEPS by offshore index using the Offshore Investment Matrix approach proposed by UNCTAD (2015). According to this approach, 3.6% of inflow foreign direct investment in six Southeast Asian countries for the period of 2012-2017 originated from tax havens and specialpurpose tax countries. The empirical simulation shows that about $ 2.195 billion of the tax revenue of Southeast Asian countries in2017 is lost because of BEPS.

scholarly journals Governance, Real Output and Foreign Direct Investment in Asia: A Panel Data Analysis

2021 ◽  
Vol 2 (2) ◽  
pp. 323-343
Author(s):  
Altaf Hussain ◽  
Muhammad Atif Nawaz ◽  
Ruqayya Ibraheem
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Positive Impact ◽  
Panel Data Analysis ◽  
Trade Openness ◽  
Real Output ◽  
Asian Countries ◽  
Causality Test ◽  
Institutional Governance ◽  
The Impact

This study intends to analyze the impact of governance (such as political, economic and institutional governance) on real output (GDP) and foreign direct investment (FDI) in 26 Asian countries during 1996 – 2019. Results of panel ARDL show the positive impact of capital, labor and trade openness on GDP and FDI. Institutional governance affects GDP and as well as FDI negatively and validates the notion that corruption greases the wheel of growth but when institutional governance is used with other indicators of governance in the model, it affects the FDI positively. Other dimensions of governance such as political and economic governance have a positive and significant impact on GDP and FDI in all model specifications. The results of the panel causality test that there is bi-directional causality from governance to GDP but evidence of bi-directional causality among governance indicators have also been found. The study emphasized on the policy making to improve the level of governance in Asian countries.

scholarly journals INDEKS PERSEPSI KORUPSI DAN PEMBANGUNAN MANUSIA TERHADAP PERTUMBUHAN EKONOMI DI NEGARA-NEGARA ASIA TENGGARA

Jurnal Ecogen ◽  
2019 ◽  
Vol 1 (3) ◽  
pp. 681
Author(s):  
Muhammad Fajar ◽  
Zul Azhar
Keyword(s):  
Economic Growth ◽  
Human Development ◽  
Human Development Index ◽  
Fixed Effect Model ◽  
Southeast Asian ◽  
Least Square ◽  
Asian Countries ◽  
Development Index ◽  
The Government ◽  
Southeast Asian Countries

This research aims to know and analyze determine of corruption and the human development index to economic growth in Southeast Asian countries. This research use panel least square and Fixed Effect Model. The estimation result should that corruption has a possitive and significant effect on economic growth in Southeast Asian countries and the human development Index has a possitive and significant effect on economic growth in Southeast Asian countries. From the result of this research, to increase economic growth, the government in SoutheastAsian countries must strengthen the bureaucratic and legal institutions of a country,increase the role of the government or related agencies in monitoring and crackingdown on corruption that results in lossof government productivity and allocating resources appropriately so that the creation of peace and prosperity among the countries in Southeast Asian. Keywords: Economic Growth, Corruption, Human Development Index

scholarly journals Determinant of FDI Inflows in OIC Countries

2021 ◽  
Vol 4 (1) ◽  
Author(s):  
Tania Megasari ◽  
Samsubar Saleh
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Exchange Rates ◽  
Direct Investment ◽  
Trade Openness ◽  
Political Stability ◽  
Fixed Effect Model ◽  
Fdi Inflows ◽  
Macroeconomic Variables ◽  
Effect Model

This study aims to analyze the determinants of foreign direct investment (FDI) in the Organization of Islamic Cooperation (OIC) country members for the period 2005 to 2018 The determinant variables of FDI are corruption, political stability and macroeconomic variables such as inflation, exchange rates, economic growth, and trade openness. Analysis used in the study  is the fixed effect model (FEM) of the OIC data panel.The results showed that economic growth and trade openness had a significant influence on foreign direct investment (FDI), while the effects of corruption, political stability, inflation and the exchange rate have no significant effect on foreign direct investment (FDI).

scholarly journals The impact of the Turn to the East Policy on foreign direct investment in the Russian Far East

2019 ◽  
Vol 27 (2) ◽  
pp. 366-374
Author(s):  
Han-Sol Lee
Keyword(s):  
Foreign Direct Investment ◽  
South Korea ◽  
Direct Investment ◽  
Russian Far East ◽  
Far East ◽  
Asian Countries ◽  
Far Eastern ◽  
The Impact ◽  
Policy Mechanisms ◽  
The Russian Far East

This study aims to measure the effectiveness of Russia’s Turn to the East Policy, addressed by the federal government in 2012, on the economic development of the underdeveloped Far Eastern regions, in terms of foreign direct investment (FDI) inflows data. To do so, this paper analyzed the results of the representative policy mechanisms - designed to promote the Far Eastern investments - of the Turn to the East Policy, comprised of the Eastern Economic Forum (EEC), Advanced Special Economic Zones (ASEZs), and Vladivostok Free Ports (VFPs), based on the secondary data from the governmental organizations. From the study, in spite of the previous contentions on those policy mechanisms amongst policymakers, we elucidate the incremental growing FDI - majorly contributed by the East Asian countries: China, Japan, and South Korea - propensity in the Far East. The three Eastern Asian countries promote investments in the Russian Far East for different eco-political purposes. And it further analyzed that for Russia, despite the remarkable magnitude of Chinese and Japanese FDI compared to South Korea, South Korea is still the most attractive partner, in terms of lack of threats: The Chinese expansionism, and the Kuril Island dispute with Japan.

scholarly journals European intellectual property institutions and Chinese foreign direct investment

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Constantinos Alexiou ◽  
Sofoklis Vogiazas
Keyword(s):  
Foreign Direct Investment ◽  
Intellectual Property ◽  
Direct Investment ◽  
Trade Openness ◽  
Negative Relationship ◽  
Preliminary Evidence ◽  
Institutional Distance ◽  
Content Type ◽  
Chinese Foreign Direct Investment ◽  
The Impact

PurposeWe investigate the impact of the strength of intellectual property (IP) institutions on Chinese outward foreign direct investment (OFDI).Design/methodology/approachWe use two different measures of IP on a sample of 21 European countries in the period 2003–2015. Panel quantile methodology is applied to assess the relationship at several points of the conditional distribution of OFDI.FindingsWe provide novel and robust evidence revealing a highly negative relationship between OFDI and the strength of IP institutions in Europe. This relationship which is more pronounced in the median and upper-quantiles, bolsters the conventional theoretical expectation that high institutional distance between home and host countries is inversely related to OFDI. Equally important is the preliminary evidence of the non-linear impact of IP at the median and upper-quantiles as well as the impact of other controlling variables such as GDP, population, trade openness and unit labour costs on Chinese OFDI.Originality/valueThe ensuing theoretical implications are of great significance for future studies on the institutional distance and drivers of OFDI by emerging economies as well as for European policymakers in so far as the strengthening of IP institutions constitutes a gravitational point for inward investment flows from China.

scholarly journals ANALISIS INVESTASI ASING LANGSUNG (FDI) DI NEGARA ASEAN TAHUN 2000-2017

2019 ◽  
Vol 3 (3) ◽  
pp. 397-409
Author(s):  
Futuhatul Barorah ◽  
Nazaruddin Malik ◽  
Zainal Arifin
Keyword(s):  
Foreign Direct Investment ◽  
Panel Data ◽  
Interest Rate ◽  
Linear Regression ◽  
Multiple Linear Regression ◽  
Direct Investment ◽  
Trade Openness ◽  
Analytical Tool ◽  
Gdp Growth ◽  
Testing Hypotheses

The aim of this research is nalyze foreign direct investment (FDI) from 2000 to 2017. The analytical tool used was multiple linear regression with panel data method by testing hypotheses namely F test, t-test, and Determination Coefficient R2. The software used in the analysis of this study was Eviews 9. The finding of the study denotes that all of influence of GDP growth, Trade Openness, Interest Rate and Inflation gave influence toward on Foreign Direct Invesment with a probability value of 0,0000. While individually, The country of Myanmar has the highest intercept inversely proportional to Malaysia which has the smallest intercept. While individually GDP growth and Trade Openness has a positive and significant effect on Foreugn Direct Invesment, Interest Rate and inflation has a negative and significant effect on Forign Direct Invesment.

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