An Empirical Study of ASEAN Economic Growth

Abstract

Amid the Covid-19 Pandemic, the economic growth all countries plummeted. To analyze these countries' economic growth development, necessary for analyzing factors that affect the economic growth, both are the long and the short term. This study aims to analyze the overview conditions the economic growth of Asean countries, then to analyze the influence of macroeconomy variables, such as foreign direct investment (FDI), free trade/open economy, and inflation on the economic growth be it is long and the short term. Methods used in this case are quantitative and qualitative approach. The quantitative approach is using Error Correction Model, and the graphical analysis is used to describe qualitative approach. Some of Asean countries such as Thailand, Indonesia, Malaysia, Singapore are taken as a sample due to macroeconomy variables of Philippines fail the stationary level test stage, in the meantime, there is no cointegration indicated variable for Vietnam. So, there are negative the economic growth for some Asean countries, Thailand is −6,08%, Indonesia is −2,07%, Malaysia is −5,58%, and Singapore is −5,39%. For the economic growth of Indonesia in the short and long term, none of the foreign direct investment (FDI), free trade, and inflation can significantly affect the economic growth. In the long and short term, Malaysia is impacted by FDI, and the open economy is clearly positive. At the same time, inflation is negative but not significant. The long term, economic growth of Singapore, no independent variables can affect the economic growth of Singapote. In the meantime in the short term, only inflation has a significant positive impact. In the long term, the economic growth of Thailand is not influenced by these three variables, meanwhile in the short term, FDI has a positive significant effect on the economic growth of Thailand.