Work

Assessing the corruption perceptions index and rule of law index as drivers of FDI inflows in emerging Asia-Pacific economies: A panel data approach

Year: 2026

Type: article

Abstract: This study examines whether institutional quality, represented by the Corruption Perceptions Index (CPI) and Rule of Law Index (RLI), influences foreign direct investment (FDI) inflows in emerging Asia-Pacific economies. Using an unbalanced panel of 19 economies from 2010 to 2022, the study applies static panel-data regression with pooled ordinary least squares, fixed-effects, and random-effects specifications. The CPI and RLI are significant when examined separately without macroeconomic controls, but their effects become statistically insignificant once the control variables are included. GDP per capita and population emerge as the more robust determinants of FDI inflows, indicating a predominantly market-seeking motive. The findings suggest that policymakers should complement governance improvements with measures that expand market opportunities, regional integration, and trade connectivity.

Source: Journal of Governance and Integrity

DOI: 10.15282/jgi.9.1.2026.12250

Authors: Kevin William Timothy, Phaik Nie Chin, Jeffrey S. S. Cheah

Institution: Universiti Sains Malaysia

Language: English

Topic: Corruption and Economic Development

Subfield: Sociology and Political Science

Field: Social Sciences

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: diamond

Funder: Universiti Sains Malaysia