The determinants of greenfield foreign direct investments in five selected asean countries

Multinational companies invest in the form of either greenfield FDI or merger and acquisitions and a massive empirical literature is available on determinants of aggregate FDI.The aim of this study is to extend the previous work through the analysis of panel data of five Asean countries, over the period 2002 to 2015, namely Indonesia, Malaysia, Philippine, Thailand and Vietnam in order to identify macroeconomic determinants of greenfield FDI. The study found evidence that GDP and gross fixed capital formation(GFCG) are significantly influential in determining the greenfield FDI from the whole of our selected sample of Asean countries. Therefore, improved level of net amount of fixed capital accumulation and increased level of economic growth is favourable for the host country to attract the greenfield FDI. It is also recommended that countries should improve infrastructure and financial institution to increase foreign investment subsequenlty economic growth in Asean.