Corruption and Economic Growth in ASEAN-5 Countries

Firman Firman; Fathan Munim

doi:10.29259/jep.v20i1.16131

Corruption and Economic Growth in ASEAN-5 Countries

Firman Firman, Fathan Munim

Abstract

The goal of economic development is economic growth nor foreign direct investment, but this increase must be supported by improving the quality of people, the population, and reducing the level of corruption. The purpose of this study is to determine the impact of corruption on economic growth and foreign direct investment. Using the variables of economic growth, foreign direct investment, corruption perception index, population, and human development index. The sample is ASEAN-5 countries, namely Indonesia, Malaysia, Singapore, Philippines, and Thailand from 2010-2020. The findings of our first model show that neither the corruption perception index nor the population index is significant, while the human development index has a positive relationship and has a significant effect on foreign direct investment in ASEAN-5. The findings of our second model are that the corruption perception index has a negative and significant effect on economic growth, while the human development index and foreign direct investment have no significant effect on economic growth in ASEAN-5.

Keywords

economic growth, FDI, corruption perception index, HDI, population

Full Text:

PDF

References

Afonso, A., & Rogrigues, E. de S. F. L. (2021). Corruption and economic growth: does the size of the government matter? Economic Change and Restructuring, 55, 543–576. https://doi.org/10.1007/s10644-021-09338-4

Ahmeti, S., Gjonbalaj, F., Blyta, E., & Lumezhi, L. (2008). Corruption and Economic Development. ILIRIA International Review, 2(1),91-102. https://doi.org/10.21113/iir.v2i1.164

Ahmad, E., Ullah, M. A., & Arfeen, M. I. (2012). Does corruption affect economic growth? Latin American Journal of Economics, 49(2), 277–305. https://doi.org/10.7764/LAJE.49.2.277

Akar, G., Saritas, T., & Kizikaya, O. (2021). ?nsani Geli?menin Ekonomik Büyümeye Etkisi: Geçi? Ekonomileri Üzerine Bir Uygulama. Business and Economics Research Journal, 12(2), 307–318. https://doi.org/10.20409/berj.2021.323

Alfada, A. (2019). Corruption and Economic Growth in ASEAN Member Countries. Economics and Finance in Indonesia, 65(2), 111. https://doi.org/10.47291/efi.v65i2.628

Argiro, M. (2003). Foreign Direct Investment and Economic Growth in the European Union. Journal of Economic Integration, 18(4), 689–707.

Asongu, S. A. (2013). How would population growth affect investment in the future? Asymmetric panel causality evidence for Africa. African Development Review, 25(1), 14–29. https://doi.org/10.1111/j.1467-8268.2013.12010.x

Attila, J. G. (2018). Corruption, Taxation and Economic Growth: Theory and Evidence. CERDI, Etudes et Documents, 29(June), 1-27. https://doi.org/10.2139/ssrn.2260995

Audi, M., & Ali, A. (2019). Exploring the Linkage Between Corruption and Economic Development in the Case of Selected Developing and Developed Nations. International Journal of Economics and Financial Issues, 9(4), 37–49. https://doi.org/10.32479/ijefi.8052

Azam, M., & Ahmad, S. (2013). The effects of corruption on foreign direct investment inflows: Some empirical evidence from less developed countries. Journal of Applied Sciences Research, 9(6), 3462–3467.

Basuki. A.T & Prawoto. N (2016). Analisis Regresi dalam Penelitian Ekonomi dan Bisnis (dilengkapi aplikasi SPSS dan Eviews). Jakarta: Raja Grafindo Persada

Bucci, A., Erayd?n, L., & Müller, M. (2019). Dilution effects, population growth and economic growth under human capital accumulation and endogenous technological change. Journal of Macroeconomics, 62, 103050. https://doi.org/10.1016/j.jmacro.2018.08.003

Blackburn, K., Bose, N., & Haque, M. E. (2011). Public expenditures, bureaucratic corruption and economic development. Manchester School, 79(3), 405–428. https://doi.org/10.1111/j.1467-9957.2009.02168.x

Das, A., Dash, D. P., & Sethi, N. (2020). Innovation, Corruption, and Economic Growth in Emerging ASIA. Buletin Ekonomi Moneter Dan Perbankan, 23(3), 347 - 364. https://doi.org/10.21098/bemp.v23i3.1183

Deshiri, M., Hassan, Sametri, & Morteza. (2012). Impact of human development index and rule of law to attract foreign direct investment in selected developing countries. MPRA Munich Personal RePEc Archive, 2116, 1–33.

Elistia, E., & Syahzuni, B. A. (2018). the Correlation of the Human Development Index (Hdi) Towards Economic Growth (GDP per capita) in 10 ASEAN Member Countries. Journal of Humanities and Social Studies, 2(2), 40–46. https://doi.org/10.33751/jhss.v2i2.949

Epaphra, M. (2014). Empirical Investigation of the Determinants of Tanzania’s National Savings. Journal of Economics and Development Studies, 2(4), 223-241. https://doi.org/10.15640/jeds.v2n4a16

Fauzan, & Mahmuddin. (2019). Pengaruh Inflasi Dan Pertumbuhan Penduduk Terhadap Pertumbuhan Ekonomi Kota Lhokseumawe. Jurnal Akuntansi dan Pembangunan, 5(1), 11-22.

Gilal, M. A., Hussain, K., Ajmair, M., & Akram, S. (2016). Foreign Direct Investment and Trade Components in Context of Pakistan. European Scientific Journal, 12(34), 384-393. https://doi.org/10.19044/esj.2016.v12n34p384

Gründler, K., & Potrafke, N. (2019). Corruption and economic growth: New empirical evidence. European Journal of Political Economy, 60(December), 101810. https://doi.org/10.1016/j.ejpoleco.2019.08.001

Hamaudi, M. El, & Aimer, N. (2017). The impact of foreign direct investment on economic growth in Nigeria. International Research Journal of Finance and Economics, 73(6), 133–143. https://doi.org/10.22610/imbr.v7i4.1166

Heller, P. (2010). People and Places: Can They Align to Bring Growth to Africa? Center for Global Development, September. www.cgdev.org

Ighodaro, C. A., & Igbinedion, S. O. (2020). Corruption and Economic Growth in West Africa. Jejak, 13(2), 265–279. https://doi.org/10.15294/jejak.v13i2.24228

Iskandar, I. (2017). Effect Of Human Development Index Fund on Economic Growth Through A Special Autonomy. Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi Dan Pembangunan, 18(1), 50. https://doi.org/10.23917/jep.v18i1.2920

Karimi, M. S., & Daiari, E. H. (2018). Does institutions matter for economic development? Evidence for ASEAN selected countries. Iranian Economic Review, 22(1), 1–20. https://doi.org/10.22059/ier.2018.65343

Kasasbeh, H. A., Mdanat, M. F., & Khasawneh, R. (2018). Corruption and FDI inflows: Evidence from a small developing economy. Asian Economic and Financial Review, 8(8), 1075–1085. https://doi.org/10.18488/journal.aefr.2018.88.1075.1085

Kaukab, M. E., & Surwandono, S. (2021). Convergence of human development index: Case study of foreign direct investment in asean. Business: Theory and Practice, 22(1), 12–17. https://doi.org/10.3846/btp.2021.12153

Khaliq, A. (2015). Foreign direct investment and economic growth: Empirical evidence from India. Afro-Asian Journal of Finance and Accounting, 5(4), 344–355. https://doi.org/10.1504/AAJFA.2015.073487

Klasen, S., & Lawson, D. (2007). The Impact of Population Growth on Economic Growth and Poverty Reduction in Uganda. Departmental Discussion Papers 133, University of Goettingen, Department of Economics.

Kuhe, D. A. (2019). The impact of population growth on economic development in Pakistan. Middle East Journal of Scientific Research, 18(4), 483–491. https://doi.org/10.5829/idosi.mejsr.2013.18.4.12404

Kulu, E., Mensah, S., & Mike Sena, P. (2021). Effects of foreign direct investment on economic growth in Ghana: the role of institutions. Economics of Development, 20(1), 23–34. https://doi.org/10.21511/ed.20(1).2021.03

Kurniawan, Y., Ratnasari, R. T., & Mustika, H. (2020). The Corruption and Human Development To the Economic Growth of OIC Countries. Jurnal Ekonomi Dan Bisnis Islam (Journal of Islamic Economics and Business), 6(2), 189. https://doi.org/10.20473/jebis.v6i2.20472

Lestari, I., Effendi, N., & Priyono, A. (2020). Financial Development, Economic Growth, and Environmental Degradation Nexus in ASIAN Emerging Markets. Jurnal Ekonomi Pembangunan, 18(2), 177-189. doi:https://doi.org/10.29259/jep.v18i2.12565

Lutfi, A. F., Zainuri, Z., & Diartho, H. C. (2020). Dampak Korupsi Terhadap Pertumbuhan Ekonomi: Studi Kasus 4 Negara di ASEAN. E-Journal Ekonomi Bisnis Dan Akuntansi, 7(1), 30. https://doi.org/10.19184/ejeba.v7i1.16482

Mahdawi, Ratnawati, N., Saputra, J., Ilham, R. N., Siahaan, R., Jayanti, S. E., Sinurat, M., & Nainggolan, P. (2021). The effect of population growth on economic growth: An evidence from Indonesia. Proceedings of the International Conference on Industrial Engineering and Operations Management, 141–148.

Mahroji, D., & Nurkhasanah, I. (2019). Pengaruh Indeks Pembangunan Manusia Terhadap Tingkat Pengangguran Di Provinsi Banten. Jurnal Ekonomi-Qu, 9(1), 51-72. https://doi.org/10.35448/jequ.v9i1.5436

Mamingi, N., & Perch, J. (2016). Population Growth and Economic Growth / Development : An Empirical Investigation for Barbados. 4(4), 93–106.

Mo, P. H. (2001). Corruption and Economic Growth. Journal of Comparative Economics, 29(1), 66–79. https://doi.org/10.1006/jcec.2000.1703

Muharromy, N. S. El, & Auwalin, I. (2021). the Effect of Population Growth and Trade Openness on Economic Growth of the Oic Countries. Jurnal Ekonomi Syariah Teori Dan Terapan, 8(5), 537. https://doi.org/10.20473/vol8iss20215pp537-547

Nasir, M. S., Wibowo, A. R., & Yansyah, D. (2021). The Determinants of Economic Growth: Empirical Study of 10 Asia-Pacific Countries. Signifikan: Jurnal Ilmu Ekonomi, 10(1), 149–160. https://doi.org/10.15408/sjie.v10i1.18752

Nawatmi, S. (2016). Pengaruh Korupsi Terhadap Pertumbuhan Ekonomi Studi Empiris Negara-Negara Asia Pasifik. Media Ekonomi Dan Manajemen, 31(1), 14–25.

Neamu, D. M., & Ciobanu, O. G. (2014). Human Development, Primise For Socio-Economic Development. Global Journal Commerce & Management Perspectivite, 3(4), 32-35.

Nunes, P. (2013). Does corruption inhibit foreign direct investment?. Politica/Revista de Ciencia Política, 51(1), 61–83.

Oshora, B., Nguse, T., Fekete-Farkas, M., & Zeman, Z. (2021). Economic Growth, Investment, Population Growth and Unemployment in Ethiopia. SHS Web of Conferences, 90, 01013. https://doi.org/10.1051/shsconf/20219001013

Ozpolat, A., Guven, G. G., Ozsoy, F. N., & Bahar, A. (2016). Does Rule of Law Affect Economic Growth Positively? Research in World Economy, 7(1), 107-117. https://doi.org/10.5430/rwe.v7n1p107

Peterson, E. W. F. (2017). The role of population in economic growth. SAGE Open, 7(4). https://doi.org/10.1177/2158244017736094

Podobnik, B., Shao, J., Njavro, D., Ivanov, P. C., & Stanley, H. E. (2008). Influence of corruption on economic growth rate and foreign investment. European Physical Journal B, 63(4), 547–550. https://doi.org/10.1140/epjb/e2008-00210-2

Pradana, A. N., & Sumarsono, H. (2018). Human Development Index, Capital Expenditure, Fiscal Desentralization to Economic Growth and Income Inequality in East Java Indonesia. Quantitative Economics Research, 1(2), 108–118.

Quazi, R. M. (2014). Corruption and foreign direct investment in East Asia and South Asia: An econometric study. International Journal of Economics and Financial Issues, 4(2), 231–242.

Ranis, G. (2016). Human Development and Economic Growth. Center Discussion Paper, Working Paper No. 887. Yale University, Economic Growth Center, New Haven, CT.

Ridha, M. R., & Parwanto, N. (2020). The Effect of Foreign Direct Investment, Human Development and Macroeconomic Condition on Economic Growth: Evidence from Indonesia. Journal of Indonesian Applied Economics, 8(2), 46–54. https://doi.org/10.21776/ub.jiae.2020.008.02.5

Rochaida, E. (2016). Dampak Pertumbuhan Penduduk Terhadap Pertumbuhan. Forum Ekonomi, 18(1), 14–24.

Schoeberlein, J. (2020). Corruption in ASEAN: Regional trends from the 2020 Global Corruption. Transparency International. https://knowledgehub.transparency.org/assets/uploads/kproducts/Corruption-in-ASEAN-2020_GCB-launch.pdf

Shabbir, G., Anwar, M., & Adil, S. (2016). Corruption, political stability and economic growth. Pakistan Development Review, 55(4), 689–702. https://doi.org/10.30541/v55i4i-iipp.689-702

Shome, S., & Tondon, S. (2010). Balancing Human Development With Economic Growth a Study of Asean 5. Annals of the University of Petrosani : Economics, X(1), 335–348.

Silva, M. F. G. da, Bandeira, A. C., & Garcia, F. (2011). How does corruption hurt growth? Evidences about the effects of corruption on factors productivity and per capita income. Eaesp/Fgv, 1–24.

Somtuchukwu, A. (2020). The effect of population growth on environmental quality. Population Research and Policy Review, 15(2), 95–108. https://doi.org/10.1007/BF00126129

Suanes, M. (2016). Foreign direct investment and income inequality in Latin America: A sectoral analysis. CEPAL Review, 2016(118), 45–61. https://doi.org/10.18356/13c68e36-en

Sukirno, S. (2016). Makro Ekonomi Modern. Perkembangan Pemikiran Dari Klasik Hingga Keynesian Baru. PT. RajaGrafindo Persada.

Susic, I., Stojanovic-Trivanovic, M., & Susic, M. (2017). Foreign direct investments and their impact on the economic development of Bosnia and Herzegovina. IOP Conference Series: Materials Science and Engineering, 200(1). https://doi.org/10.1088/1757-899X/200/1/012019

Susilo, D. (2020). The Impact of Foreign Direct Investment on Economic Growth in Malaysia. BISE: Jurnal Pendidikan Bisnis Dan Ekonomi, 4(1), 50-63. https://doi.org/10.24191/abrij.v6i1.9937

Thach, N. N., & Ngoc, B. H. (2021). Impact of economic freedom on corruption revisited in ASEAN countries: A bayesian hierarchical mixed-effects analysis. Economies, 9(1), 1-16. https://doi.org/10.3390/economies9010003

Tseng, T. Y. (2020). Corruption and Economic Growth: The Effects of Business Ethics. NTU Management Review, 30(1), 103–130. https://doi.org/10.6226/NTUMR.202004_30(1).0004

Yang, Y., Zheng, R., & Zhao, L. (2021). Population aging, health investment and economic growth: Based on a cross-country panel data analysis. International Journal of Environmental Research and Public Health, 18(4), 1–16. https://doi.org/10.3390/ijerph18041801

DOI: https://doi.org/10.29259/jep.v20i1.16131

Refbacks

There are currently no refbacks.

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Jurnal Ekonomi Pembangunan
Jalan Raya Palembang-Prabumulih Km. 32
Jurusan Ekonomi Pembangunan, Fakultas Ekonomi Universitas Sriwijaya
Indralaya, Sumatera Selatan, Indonesia
Email: jep.unsri@gmail.com, Tel/Fax : (0711)580231

p-ISSN: 1829-5843, e-ISSN 2685-0788