Assessing the corruption perceptions index and rule of law index as drivers of FDI inflows in emerging Asia-Pacific economies: A panel data approach
DOI:
https://doi.org/10.15282/jgi.9.1.2026.12250Keywords:
Foreign Direct Investment, Corruption Perception Index, Rule of Law Index, Emerging Asia Pacific, Panel RegressionAbstract
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.
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