Convergence of Human Development Index: case study of foreign direct investment in ASEAN
Abstract
This article examines the role of bilateral FDI and income convergence in affecting HDI increase in countries with middle HDI in ASEAN. The ASEAN Economic Community has been developing and it is expected that the gaps between nations can be covered. This article explores how economic intervention through HDI and income convergence can boost HDI improvement. The writers examine the presence of a statistically significant causal relationship between source country’s GDP, home country’s GDP, source country’s FDI towards the home country, source country total FDI, home country total FDI, and the percentage of source country FDI towards source country total FDI with both countries HDI convergence. Measurement is carried out using the generalized method of moments. Based on yearly samples of high HDI countries (Malaysia, Thailand, Singapore) couple with medium HDI countries (Laos, Vietnam, Cambodia, Myanmar, Indonesia, and Philippine) during 2013–2017 period, the writers find statistically significant impact of home country GDP, source country FDI towards all countries, and FDI percentage of the home country compared to all countries.
Keyword : HDI, bilateral FDI, GDP, ASEAN, investment, economic development
How to Cite
Kaukab, M. E., & Surwandono, S. (2021). Convergence of Human Development Index: case study of foreign direct investment in ASEAN. Business: Theory and Practice, 22(1), 12-17. https://doi.org/10.3846/btp.2021.12153
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Ahmad, F., Draz, M. U., & Yang, S. (2018). Causality nexus of exports, FDI and economic growth of the ASEAN5 economies: evidence from panel data analysis. The Jourinal of International Trade & Economic Development, 27(6), 685–700. https://doi.org/10.1080/09638199.2018.1426035
ASEAN. (2019). FDI by hosts and sources. https://data.aseanstats.org/fdi-by-hosts-and-sources
Asongu, S., & Nwachukwu, J. (2016). The role of governance in mobile phones for inclusive human development in Sub–Saharan Africa. Technovation, 55–56, 1–13. https://doi.org/10.1016/j.technovation.2016.04.002
Ausloos, M., Eskandary, A., Kaur, P., & Dhesi, G. (2019). Evidence for gross domestic product growth time delay dependence over foreign direct investment. A time-lag dependent correlation. Physica A: Statistical Mechanics and Its Applications, 527(121181), 1–22. https://doi.org/10.1016/j.physa.2019.121181
Berik, G., Rodgers, Y. van der M., & Seguino, S. (2009). Feminist economics of inequality, development, and growth. Feminist Economics, 15(3), 1–33. https://doi.org/10.1080/13545700903093524
Bucur, I., & Stangaciu, O. (2015). The European union convergence in terms of economic and human development. CES Working Papers, 7(2), 256–275.
Bunnag, S. (2019). Income and HDI convergence in the Mekong economies: regional development revisited. Social Science Review, 15–30.
Černák, J. (2017). Low fertility rate reversal: a feature of interactions between biological and economic systems systems. ArXiv Preprint, 1701.03481.
Dunne, P. (2015). Bilateral foreign direct investment from South Africa and income convergence in the SADC region. In TIPS Annual Forum. Johanesburg.
Egri, Z., & Tanczos, T. (2018). The spatial peculiarities of economic and social convergence in Central and Eastern Europe. Regional Statistics, 8(1), 1–29. https://doi.org/10.15196/RS080108
Iamsiraroj, S., & Ulubasoglu, M. (2015). Foreign direct investment and economic growth: A real relationship or wishful thinking? Economic Modeling, 51, 200–213. https://doi.org/10.1016/j.econmod.2015.08.009
IMF. (2019). World economic outlook database. https://www.imf.org/en/publications/weo
Jaros, K. (2019). Convergence of the standard of living in Polish NUTS 2 regions. Barometr Regionalny, 17(1), 15–30. https://doi.org/10.35480/BRAiP-2019.17.1-721
Jednak, S., Kragulj, D., & Bulajic, M. (2018). A comparative analysis of development in Southeast European countries. Technological and Economic Development of Economy, 24(1), 253–270. https://doi.org/10.3846/20294913.2016.1212438
Jude, C., & Levieuge, G. (2017). Growth effect of FDI in developing economies: the role of institutional quality. The World Economy, 40(4), 715–742. https://doi.org/10.1111/twec.12402
Keita, L. (2019). Models of economic growth and development in the context of human capital investment: the way forward for Africa. Africa Development, 43(3), 159–183.
Khazaei, S., Rezaeian, S., Khazaei, S., Mansori, K., Moghaddam, S., & Ayubi, E. (2016). Effects of human development index and its components on colorectal cancer incidence and mortality: a global ecological study. Asian-Pacific Journal of Cancer Prevention, 17(sup3), 253–256. https://doi.org/10.7314/APJCP.2016.17.S3.253
Lee, S. (2018). Three essays on economic growth, country heterogeneity, and regime-switching. Univesity of Oklahoma.
Menon, J. (2013). Narrowing the development divide in ASEAN: the role of policy. Asian-Pacific Economic Literature, 27(2), 25–51. https://doi.org/10.1111/apel.12025
Muhammad, B., & Khan, S. (2019). Effect of bilateral FDI, energy consumption, CO2 emission and capital on economic growth of Asia countries. Energy Reports, 5, 1305–1315. https://doi.org/10.1016/j.egyr.2019.09.004
Mustafa, G., Rizov, M., & Kernohan, D. (2017). Growth, human development, and trade: the Asian experience. Economic Modeling, 61, 93–101. https://doi.org/10.1016/j.econmod.2016.12.007
Noorderhaven, N. G., Wennekers, A. S. R. M., Hofstede, G., Thurik, A. R., Wildeman, R. E., & Noorderhaven, N. (1999). Self-employment out of dissatisfaction: an international study (No. 99-089/3). Tinbergen.
Nwaogu, U. G., & Ryan, M. J. (2015). FDI, Foreign aid, remittance and economic growth in developing countries. Review of Development Economics, 19(1), 100–115. https://doi.org/10.1111/rode.12130
Nyström, K. (2008). The institutions of economic freedom and entrepreneurship: evidence from panel data. Public Choice, 136(3–4), 269–282. https://doi.org/10.1007/s11127-008-9295-9
Pegkas, P. (2015). The impact of FDI on economic growth in Eurozone countries. Journal of Economic Asymmetries, 12(2), 124–132. https://doi.org/10.1016/j.jeca.2015.05.001
Rasool, M. (2017). Evaluation of life conditions in Middle East Region with focus on Bahrain. University of Pardubice.
Sinaga, O., Saudi, M. H. M., & Roespinoedji, D. (2018). The relationship between economic indicators, Gross Domestic Product (GDP) and Supply Chain Performance. Polish Journal of Management Studies, 18(1), 338–352. https://doi.org/10.17512/pjms.2018.18.1.25
Sookias, R. B., Passmore, S., & Atkinson, Q. D. (2018). Deep cultural ancestry and human development indicators across nation states. Royal Society Open Science, 5(171411). https://doi.org/10.1098/rsos.171411
Sunarya, I. W. (2017). Analysis of human resources development in Province of Nusa Tenggara Timur From 2013–2015. Jurnal Aplikasi Manajemen, Ekonomi Dan Bisnis, 2(1), 22–30.
Terzic, L. (2018). The new paradigm of innovation economics in the 21st Century: solving the enigma of economic growth. Revista Romana de Economie, 1, 39–58.
Thanh, D. (2016). Direct investment in Vietnam from ASEAN countries in the context of AEC formation in 2015. Ekonomicke Trendy, 4, 62–75.
UNDP. (2019). Human Development Data (1990–2018). http://hdr.undp.org/en/data