Impact of Economic Integration on Foreign Direct Investment into ASEAN5

The paper aims to analyse the relationship between economic integration and FDI for ASEAN5, namely Indonesia, Malaysia, Philippines, Singapore and Thailand through panel analysis. In order to compete, in the face of the two regional growing giants, China and India, it is crucial to identify and understand the determinants of FDI flowing into the regional trade area (RTA), in particular, whether economic integration to form a larger entity, does contribute to FDI inflow. FDI inflow into ASEAN5 was thought to be profitseeking in nature. This study finds that FDI inflow into ASEAN5 is more market-seeking. This may result from the growing internal markets of ASEAN5.