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ASEAN Economic Integration and Regional Development Inequality: An Empirical Analysis, 2019–2024

Year: 2025

Type: article

Abstract: This study investigates the impact of economic integration on regional development inequality across ASEAN member states during the 2019–2024 period. Employing a panel data model, the dependent variable—regional inequality index (Hoover and Theil Index)—is examined against key independent variables: Foreign Direct Investment (FDI), GDP per capita, Human Development Index (HDI), and Fiscal Equalization Funds. The findings reveal that FDI (+0.042) and GDP per capita (–0.065) contribute to widening spatial disparities, indicating growth concentration in core economic regions. In contrast, HDI (–0.031) and Fiscal Equalization Funds (–0.048) exert a significant mitigating effect on inequality, underscoring the role of human development and fiscal redistribution. These results align with the backwash effect theory and the Kuznets curve, suggesting that economic growth without spatial intervention risks exacerbating interregional disparities. The study recommends policy strategies such as decentralized industrial clustering, regionally targeted investment incentives, and enhanced interregional connectivity to promote more inclusive and equitable development.

Source: Journal of Economics Finance and Management Studies

DOI: 10.5281/zenodo.16885315

Authors: Benius, Ensy Veronika

Institution: University of Palangka Raya

Language: English

Topic: Regional Economic and Spatial Analysis

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Reduced inequalities, Decent work and economic growth, Partnerships for the goals, Industry, innovation and infrastructure

Open Access status: diamond

OpenAlex ID: W6968342452

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