Foreign Direct Investment dan Risiko Politik di ASEAN

Olivia Tanaya; Rr. Savina  Kanti Wilujeng; Irzameingindra Putri Radjamin

doi:10.33395/owner.v6i2.805

Authors

Olivia Tanaya Universitas Surabaya
Rr. Savina Kanti Wilujeng Universitas Surabaya
Irzameingindra Putri Radjamin Universitas Surabaya

DOI:

10.33395/owner.v6i2.805

Abstract

Political risk is a risk that occurs due to political disturbances in a country that can affect its economy. This risk is one of the risks that investors consider when investing in a country. High political risks can create obstacles that potentially disrupt investors' business operations. This study aims to see the impact of political risk on Foreign Direct Investment (FDI) in the ASEAN region in 1996-2019 using panel data analysis with the best model, namely the fixed effect model (FEM). Sources of data in this study came from the World Governance Indicator (WGI) and World Development Indicator (WDI). The results of this study indicate that political risk as reflected in political stability and regulatory quality has a significant influence on FDI inflows in the ASEAN region. Political instability could make investors reluctant to invest in the country due to the concern about disturbances that will occur in the future. The role of governments in ASEAN countries is needed to maintain political stability and attract more foreign investors to invest in the ASEAN region. In addition, a country needs to have good regulatory quality so that investors do not experience obstacles in the early stages of investment. Complicated licensing and many regulations can be one of the obstacles in investing.

Downloads

Download data is not yet available.

Plum-X Analityc

References

Agarwal, J., & Feils, D. (2007). Political risk and the internationalization of firms: An empirical study of Canadian-based export and FDI firms. Canadian Journal of Administrative Sciences, 24(3), 165–181. https://doi.org/10.1002/cjas.26

Ajijia, S. R., Sari, S. W., Setianto, R. H., & Primanti, M. R. (2011). Cara Cerdas Menguasai E-Views. Salemba Empat.

Basuki, A. T. (2020). Uji Multikolinieritas dan Perbaikan Multikolinieritas. In Bahan Ajar Ekonometrika (pp. 1–10). Univeritas Muhammadiyah Yogyakarta.

Biro, F. P., Erdey, L., Gall, J., & Markus, A. (2019). The Effect of Governance on Foreign Direct Investment in Latin America- Issues of Model Selection. Global Economy Journal, 19(1). https://doi.org/10.1142/S2194565919500064

Campos, N. F., & Kinoshita, Y. (2004). Why Does Fdi Go Where it Goes? New Evidence From the Transition Economies. In IMF Working Papers (Vol. 3, Issue 228).

Duho, K. C. T., Amankwa, M. O., & Musah-Surugu, J. I. (2020). Determinants and convergence of government effectiveness in Africa and Asia. Public Administration and Policy: An Asia-Pacific Journal, 23(2), 199–215. https://doi.org/https://doi.org/10.1108/PAP-12-2019-0039

Dwinitasari, N. H., & Sulasmiyati, S. (2017). The Influence of Host Country Political Risk Towards Foreign Direct Investment and Macroeconomics as Control Variable (A Study at Indonesia ’s Case Period of 2006-2015). Jurnal Administrasi Bisnis (JAB), 52(1), 81–89.

Elleuch, N. M., Jaouadi, I. Z., & Jaouadi, S. (2015). Examination of the impact of political and country risk on foreign direct investment inflows in Tunisia. European Academic Research II, 2(11), 14434–14445.

Erkekoglu, H., & K?l?çarslan, Z. (2016). Do political risks affect the foreign direct investment inflows to host countries. Journal of Business, Economics and Finance -JBEF, 52(2), 218–230. https://doi.org/10.17261/pressacademia.2016219263

ERMA. (2021). Political Risk In ASEAN. ERMA (Enterprise Risk Management Academy).

Fithri, N., & Kaluge, D. (2017). Analisis Pengaruh Pengeluaran Pemerintah Sektor Pendidikan dan Kesehatan Terhadap Kemiskinan Jawa Timur. Jurnal Ekonomi Pembangunan, 15(2), 133–206.

Global Nonviolent Action Database. (2001). Philippine citizens overthrow President Joseph Estrada (People Power II), 2001.

GOV.UK. (2021). Overseas Business Risk-Turkey. GOV.UK.

Hansen, E., & Zegarra, J. (2016). Political risk and sovereign spreads in Latin America. Academia Revista Latinoamerica de Administracion, 29(2), Acad. Rev. Latinoam. Adm. https://doi.org/10.1108/ARLA-08-2015-0228

Hayakawa, K., Kimura, F., & Lee, H.-H. (2012). How Does Country Risk Matter for Foreign Direct Investment?

Hidayah, F. N. (2017). Analisis Dampak Kebijakan Pemerintah Indonesia Terhadap Persaingan Perdagangan Jasa di bidang kontruki dalam rangka masyarakat eknomi Asean. Law Reform, 1.

Hindrayani, A. (2013). Investasi Langsung Luar Negeri Dan Pertumbuhan Ekonomi. Jurnal Pendidikan Ekonomi (JUPE), 1(1), 51–68.

Iloie, R. E. (2015). Connections between FDI, Corruption Index and Country Risk Assessments in Central and Eastern Europe. Procedia Economics and Finance, 32, 626–633. https://doi.org/10.1016/s2212-5671(15)01442-2

Kalt, K. (2017). The Relationship of Political Risk and Foreign Direct Investment and the mediating effect of Exchange Rate Volatility. University of Groningen.

Khalfaoui, H., & Derbali, A. (2021). The determinants of foreign direct investment: what about the potential of the Arab Maghreb countries? Journal of Investment Compliance, 22(4), 295–308. https://doi.org/https://doi.org/10.1108/JOIC-04-2021-0010

Khan, M. M., & Akbar, M. (2013). The Impact of Political Risk on Foreign Direct Investment. International Journal of Economics and Finance, 5(8), 147–156. https://doi.org/10.5539/ijef.v5n8p147

Khan, R. E. A., & Hye, Q. M. A. (2014). Foreign direct investment and liberalization policies in Pakistan: An empirical analysis. Cogent Economics & Finance, 2(1), 1–12. https://doi.org/10.1080/23322039.2014.944667

Kinoshita, Y., & Campos, N. F. (2003). Why Does Fdi Go Where it Goes? New Evidence From the Transition Economies. In IMF Working Papers (Vol. 03, Issue 228). https://doi.org/10.5089/9781451875461.001

Kurul, Z., & Yalta, A. Y. (2017). Relationship between Institutional Factors and FDI Flows in Developing Countries: New Evidence from Dynamic Panel Estimation. Economies, 5(2), 1–10. https://doi.org/10.3390/economies5020017

Lee, J. (2020). Statistics, Descriptive. In International Encyclopedia of Human Geography (2nd ed., pp. 13–20). Elsevier. https://doi.org/https://doi.org/10.1016/B978-0-08-102295-5.10428-7

Lindman, L. N. (2017). Military Coups in Thailand: The Strategic Arguments to Justify a Democratic Setback. Uppsala University.

MarshMcLennan. (2019). Political Risk Map 2019. Marsh.

Martirosyan, G. (2020). What are the impacts of Trade Openness on Economic Growth? Eramus Universiteit Rotterdam.

Min, S., Kim, N., & Zhan, G. (2017). The impact of market size on new market entry: a contingency approach. European Journal of Marketing, 5(1), 2–22. https://doi.org/https://doi.org/10.1108/EJM-12-2013-0696

Mohamed, E. A. (2019). The impact of political reform on the stability of the state of Kuwait since 2010. Journal of Humanities and Applied Social Sciences, 2(2), 101–114. https://doi.org//doi.org/10.1108/JHASS-06-2019-0001

Mulyadi, M. (2011). Penelitian Kuantitatif Dan Kualitatif Serta Pemikiran Dasar Menggabungkannya. Jurnal Studi Komunikasi Dan Media, 15(1).

OECD. (2013). Main Political Risk In Southeast Asia. OECD.

Qingzhen, C. (2015). Five Risks to ASEAN Growth. Global Risk Insights.

Rashid, M., Looi, X. H., & Wong, S. J. (2017). Political stability and FDI in the most competitive Asia Pacific countries. Journal of Financial Economic Policy, 9(2), 140–155. https://doi.org/10.1108/JFEP-03-2016-0022

Rathnayaka Mudiyanselage, M. M., Epuran, G., & Tesca?iu, B. (2021). Causal Links between Trade Openness and Foreign Direct Investment in Romania. Journal of Risk and Financial Management, 14(3), 90. https://doi.org/10.3390/jrfm14030090

Sabir, S., Rafique, A., & Abbas, K. (2019). Institutions and FDI: evidence fromdeveloped and developing countries. Financial Innovation, 5(8), 1–20. https://doi.org///doi.org/10.1186/s40854-019-0123-7

Salem, R., & Younis, R. (2021). The Effect of country risk on foreign direct investment: Evidence from Egypt. ?????? ??????? ???????? ? ???????, 2(51), 276–243. https://doi.org/10.21608/jsec.2021.154167

Shah, M. H., & Afridi, A. G. (2015). Significance of Good Governance for FDI Inflows in SAARC Countries. Business & Economic Review, 7(2), 31–52.

Simanjuntak, D. (2018). FDI, Political Risk, and Government Policy. Eko-Regional Jurnal Pengembagan Ekonomi Wilayah, 13(1), 34–39. https://doi.org/10.20884/1.erjpe.2018.13.1.1162

Sitong, S. (2017). The ASEAN Economic Integration and Foreign Direct Investment: A Case Study of Japan’s FDI on the Automotive Industry.

Sottilotta, C. E. (2012). Political Risk: Concepts, Definitions, Challenges. LUISS School of Government Annual Conference 2012 “Investing in the Age of Political Risks.” https://doi.org/10.13140/2.1.3205.9846

Suparno, B. A. (2012). Reformasi dan Jatuhnya Soeharto. PT Kompas Media Nusantara.

Tahmad, A. M. I., & Adow, A. (2018). The impact of trade openness on foreign direct investment in Sudan by sector in the 1990-2017 period: An empirical analysis. Economic Annals-XXI, 172(7–8), 14–21. https://doi.org/10.21003/ea.V172-03

Tanaya, O., & Suyanto, S. (2022). The Causal Nexus Between Foreign Direct Investment and Economic Growth in Indonesia: An Autoregressive Distributed Lag Bounds Testing Approach. Periodica Polytechnica Social and Management Sciences, 30(1), 57–69. https://doi.org/https://doi.org/10.3311/PPso.16799

Teeramungcalanon, M., Chiu, E. M. ., & Kim, Y. (2020). Importance of Political Element to Attract FDI for Asean and Korean Economy. Journal of Korea Trade, 24(8), 63–80.

The ASEAN Secretariat and UNCTAD. (2017). ASEAN Investment Report 2017 Foreign Direct Investment and Economic Zones in ASEAN.

The ASEAN Secretariat, & UNCTAD. (2014). ASEAN Investment Report 2013-2014: FDI Development and Regional Value Chains.

The ASEAN Secretariat, & UNCTAD. (2021). ASEAN Investment Report 2020-2021.

Widarjono, A. (2005). Ekonometrika:teori dan aplikasi untuk ekonomi dan bisnis (1st ed.). Ekonesia.

Wilkin, S., & Minor, J. (2001). Managing Today’s Political Risks. The Risk Management Letter, 22(6).

World Bank. (2021). World Governance Indicator. World Bank.

Yellapu, V. (2018). Descriptive statistics. International Journal of Academic Medicine, 4(1), 60. https://doi.org/10.4103/IJAM.IJAM_7_18

Zulhaimi, H., & Nuraprianti, N. R. (2019). Pengaruh Profitabilitas, Ukuran Dewan Komisaris, dan Ukuran Perusahaan Terhadap Corporata social Reponsibilitu Discloure. Jurnal Riset Akuntansi Dan Keuangan, 7(3), 555–666.