FOREIGN DIRECT INVESTMENT DETERMINANTS IN THE PHILIPPINES
Abstract
Foreign direct investment (FDI) significantly boosts one country's economy and development, including the Philippines. The Philippines has continuously pursued policies to attract FDI inflows to promote economic growth, generate employment, and improve technical skills. This study is to determine the Foreign Direct Investment determinant of the Philippines, present the real GDP growth, industry value added, and real exchange rate of foreign direct investment in the Philippines from 1970 to 2020, and provide empirical evidence of foreign direct investment and the following determinants. Data on real GDP growth, industry value added, real exchange rate, and FDI of the Philippines from 1970 to 2020 are sourced from the World Bank data. The Ordinary Least Squares (OLS) regression analysis identify factors that significantly affect the FDI inflows in the Philippines. Results indicated that the real exchange rate affects the FDI inflows in the Philippines. These determinants have p-values that are lower than the 5% significance level. Thus, understanding these determinants can assist policymakers and investors in making sound choices to encourage and sustain FDI inflows, which can contribute to the Philippines' economic progress and prosperity.
JEL: F20; F21; F30
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DOI: http://dx.doi.org/10.46827/ejefr.v7i4.1594
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