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.