Perpustakaan Digital ITB

Purpose: The purpose of this study is to examine the relationship of corruption perception and rule of law index on foreign direct investment (FDI) to shed light on how FDI inflows are influenced by corruption perception and the strength of the rule of law in emerging Asia Pacific countries. Design/methodology/approach: The study employs a static panel data regression model on an unbalanced panel data of 19 Asia Pacific's emerging countries. Findings: The corruption perception index and rule of law index is not significant as determinant factor of FDI inflow to 19 Asia Pacific’s emerging countries. The study concludes that Gross Domestic Product (GDP) per capita and population are the major factors that explain opportunity-seeking motives of investors in emerging Asia Pacific. Implications: This study provides insights to policymakers to create appropriate policies to enlarging regional markets, enhancing governance, and engaging in free trade with neighboring countries to attract FDI. Originality/Value: This research adds to the body of knowledge in the domains of international business and macroeconomics in Asia Pacific's developing economies.