Institutional quality as a determinant for FDI Inflows: Evidence from ASEAN

Since the 1980s ASEAN has become an important avenue for FDI from the rest of the world.However, as the importance of FDI as a new source of economic growth engine has been recognized by many, especially other developing countries, other parts of the world are also becoming interested in attracting FDI to their countries.With the current intense competition in attracting FDI, inevitably, ASEAN has to create a better and more conducive business environment to enable it to retain the existing inflows as well as attract others to invest in Malaysia.One avenue that has not been intensively touched so far concerns the role of institutional quality in explaining the behavior of FDI inflows into ASEAN.The result of the analysis reveals the important and significant role of institutional quality in attracting FDI inflows into ASEAN