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This study employs Auto Regressive Distributed Lag (ARDL) bounds testing approach and vector error correction model within Granger causality test to examine the time series data over the period of twenty-two years (1993-2014) in order to investigate the long and short-run relationships among Foreign Direct Investment (FDI) and its determinant factors, as well as the direction causality among variables. The study finds that GDP and FER have statistically and significantly positive relationships with FDI for both longand short-run. This implies that an increasing GDP and foreign exchange reserve lead to an increase in the FDI inflows into Cambodia. But, TON has significant and negative long and short-run relationships with FDI, which is an unexpected result. Higher unskilled labors supplied in Cambodia discourage FDI inflows to the country. The political instability and deadlock in Cambodia have a negative short-run impact on FDI inflows. Moreover, a higher degree of trade openness and labor force in Cambodia cause increase in the GDP in Cambodia. The sign of ECM (t-1) coefficient is negative and significant as expected for all models, which indicates a relative speed of achieving the long-run equilibrium. This study suggests that the government should protect the internal political conflict as well as increased degree of trade openness and skilled labors in order to attract more FDI inflows into Cambodia. ©2016TAF Publishing. All rights reserved. INTRODUCTION Foreign Direct Investment (FDI) is one of the main pulses for growth and economic development, especially in the developing country like Cambodia. It is widely well-known that the FDI could produce economic benefits to the host countries by enhancing human capital, physical capital, foreign exchange, employment opportunities, productive capacity, money supply for domestic investment, the host * Corresponding author: Chantha Hor E-mail: chanthahor@hotmail.com country’s skill labor through transferring technology and management skills (Belloumi, 2014; Mottaleb & Kalirajan, 2010; Decastro, Fernandes & Campos, 2013). Economically speaking, the FDI inflows foster country’s economic growth via business and economic transition process between the host and home country. The FDI has played a significant role in the Cambodian economy for almost three decades since Cambodia received peace and political stability in 1993 through the first general election. Cambodia has transformed herself to an open economy and improved year-by-year on the level of economic freedom in order to attract FDI Phnom Penh Securities

Analysis of the impact of determinant factors on foreign direct investment in Cambodia: The ARDL bounds testing approach