Trade flow of manufacturing sector and foreign direct investment in ASEAN economic integration: the gravity model of trade | Zendy

Diah Wahyuningsih | Zendy

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Trade flow of manufacturing sector and foreign direct investment in ASEAN economic integration: the gravity model of trade

Author(s) -

Diah Wahyuningsih

Publication year - 2021

Publication title -

jurnal perspektif pembiayaan dan pembangunan daerah

Language(s) - English

Resource type - Journals

eISSN - 2355-8520

pISSN - 2338-4603

DOI - 10.22437/ppd.v8i6.10289

Subject(s) - foreign direct investment , gravity model of trade , international economics , manufacturing sector , tariff , panel data , international trade , economic integration , economics , business , manufacturing , macroeconomics , econometrics , marketing

This study aims to determine the effects of ASEAN economic integration on the manufacturing sector's trade flow and foreign direct investment. This study using panel data regression. The results show that ASEAN economic integration affects trade in the manufacturing sector and foreign direct investment (FDI) in ASEAN member countries. The tariff elimination policy increased trade flows in the manufacturing sector and foreign direct investment. The variable of GDP has a positive and significant effect on the manufacturing sector's trade flows and foreign direct investment. Exchange rate variables have a negative and significant effect on trade flows in the manufacturing sector and foreign direct investment. Meanwhile, the distance variable negatively affects trade in the manufacturing sector, but it does not affect foreign direct investment.

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