earticle

영어

The emergence of the World Trade Organization (WTO) in 1994 allows to reduce borders through openness, and facilitate the free trade movement, which drives foreign direct investment. This study investigates the effects of FDI on economic growth and the effects of the mediating effect of governmental institutions in the relationship between Foreign Direct Investment and economic growth in the Association of Southeast Asian Nations spanning 2010 to 2021. Results reveal: firstly, FDI has a positive impact on economic development, secondly, governmental plays a pivotal mediating role in the relationship between FDI and economic growth. Thus governments should implement strategies to attract FDI for economic growth. Especially, governmental institutions as pathway of this relationship can boost a positive effect of FDI, which can lead to economic development.