The impact of good governance of foreign direct investment inflows : a study on the South Asia region
Date
2018
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
The purpose of this study is to establish the impact of good governance on the inflow of foreign direct investment (FDI) among South Asian region countries. This study is conducted using secondary research where the data for World Governance Indicators (WGI) and FDI were collect from World Bank’s online database. The independent variables used for the study are Control of Corruption (CC), Government Effectiveness (GE), Political stability and absence of violence (PV), Regulatory Quality (RQ), Rule of Law (RL) and Voice and Accountability (VA), while the dependent variable used for the study is FDI. A sample of 8 member countries of SAARC was selected as a sample with 109 observations. This study used descriptive research design, and data was collected for 14 years (2002-2015). The data was checked for normality, suitability and validity through the SPSS 21. The overall result of the study shows the two factors; namely, Voice and Accountability (VA) and Government Effectiveness (GE) have significant impact on the FDI inflow in the South Asian region. The other four variables, Control of Corruption (CC), Political stability and absence of violence (PV), Regulatory Quality (RQ), and Rule of Law (RL) have a negative impact on FDI inflow indicating that these factors do not influence the attraction of FDI inflow. Therefore we concluded that improved good governance of Voice and Accountability (VA) and Government Effectiveness (GE) will increase FDI inflows.
Description
Keywords
Management