Threat of Corruption to Foreign Direct Investment and Economic Growth in Southeast Asia

Abstract

This research aims might look into the dangers caused by corruption against foreign direct investment in Southeast Asia by using the supporting variables the investment of foreign direct in the shape like the economy expansion, data technology, also Trade Openness. The scope used in this study includes 2010 to 2020 using panel data, using annual data. The data used are data from Foreign Direct Investment that enters ASEAN countries, percentage data of internet users as an indicator of ICT, corruption perception index (CPI) as an indicator of perceptions of corruption, GDP (gross domestic product) data for indicator to the economic growth, and ratio data. International trade is an indicator of Trade Openness. The PLS technique testing procedure is initiated using construction by reconstruction incorporated into the PLS calculation. We found that the Increased of foreign direct investment (FDI) are indication by the international trust level in a country, including a reflection of financial transparency supported by information and communication technology. Financial transparency is reflected in the corruption perception index. Economic prospects as reflected in economic growth or GDP growth and trade openness. The better technology of information and communication, the higher the growth of economic and trade openness at the Southeast Asia region, and the more the growth of FDI in the Southeast Asia region. And conversely, the higher the level of corruption as reflected in the corruption perception index (CPI), the more depressed the growth of foreign direct investment at Southeast Asian region.