The Impact of Foreign Direct Investment on Welfare in ASEAN: Does Environmental Degradation and Corruption Matter?

Ripa Fajarina Laming (), Abdul Hamid Paddu, Indraswati Tri Abdi Reviane and Hamrullah Hamrullah
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Ripa Fajarina Laming: Hasanuddin University, Economics Doctoral Program Student, Postgraduate Faculty of Economics and Business
Abdul Hamid Paddu: Hasanuddin University, Faculty of Economics and Business
Indraswati Tri Abdi Reviane: Hasanuddin University, Faculty of Economics and Business
Hamrullah Hamrullah: Hasanuddin University, Faculty of Economics and Business

A chapter in Proceedings of the 9th International Conference on Accounting, Management, and Economics 2024 (ICAME 2024), 2025, pp 1492-1504 from Springer

Abstract: Abstract This study investigates the impact of Foreign Direct Investment (FDI) on welfare in ASEAN countries, with a focus on environmental degradation as a mediating variable and corruption as a moderating variable. Using panel data from seven ASEAN countries over the period 2012-2023, this research analyzes the relationships between FDI, environmental degradation, corruption, and welfare through a regression model with a Random Effects Model (REM) approach, estimated using Generalized Least Square (GLS). The analysis results indicate that FDI has a negative impact on welfare, with environmental degradation amplifying this effect. On the other hand, corruption is found to have a negative impact on welfare, but as a moderating factor, it slightly reduces the negative effect of FDI. These findings suggest that the sustainability of FDI’s benefits for welfare heavily depends on improved environmental management and stronger governance.

Keywords: FDI; Enviromental Degradation; Welfare; Corruption; ASEAN (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-758-8_119

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DOI: 10.2991/978-94-6463-758-8_119

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