Trade Openness and its influence on Foreign Direct Investment in ASEAN-3

  • Noris Ismail Faculty of Business & Management, UniSZA, Gong Badak, Kuala Terengganu
  • Suraya Ismail Faculty of Business and Management, UniversitiTeknologi MARA (UiTM), Kedah Campus, Malaysia


Foreign direct investments (FDI) have emerged as the most important external capital sources for all countries. Using annual data from 1980 to 2019, this study explores trade openness and its influence on FDI in ASEAN-3. The study includes Malaysia, Indonesia, and Thailand are synonymous as ASEAN-3 countries. The Autoregressive Distributed Lag (ARDL) study shows that trade openness has influenced FDI inflow into ASEAN-3. According to empirical data, trade openness and FDI inflows in Malaysia and Indonesia have a strong relationship. Meanwhile, Thailand has a negative relationship between trade openness and FDI inflows. Overall, this study can help policymakers improve their future planning in order to capitalise on greater prospects for FDI inflows into ASEAN-3 countries.



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How to Cite
Ismail, N., & Ismail, S. (2023). Trade Openness and its influence on Foreign Direct Investment in ASEAN-3 . The Journal of Management Theory and Practice (JMTP), 4(1), 45-52.
Finance & Economics