Governance, competitiveness and economic performance in attracting foreign direct investment inflow in Saarc and Asean countries

Abstract

The underlying purposes of the study are to examine global competitiveness and human development indicators as factor affecting foreign direct investment inflow using cross sectional data of 70 FDI receiving countries and implication for SAARC and ASEAN Countries. To examine the governance and economic performance affecting the growth of foreign direct investment inflow and implication for SAARC and ASEAN Countries and to suggests policy measures to improve foreign direct investment inflow in SAARC and ASEAN countries. FDI can play a vital role for the economic development of developing countries. The empirical study employing multiple regression analysis would suggest that the determinants of FDI especially the human development, global competitiveness and better business environment affects the growth of FDI. The study also would suggest that the countries do have high per capita income, domestic savings and other better domestic economic performances tend to receive more FDI. The non-economic performances of both the regions would suggest that the countries do have better governance in terms of government effectiveness, property rights and better control of corruption and political stability can attract more FDI. The countries in SAARC region needs to improve institutional effectiveness, human development and competitiveness more than the ASEAN countries to attract more FDI.