An Examination of the Impact of AFTA on Southeast Asian Foreign Direct Investment

The aim of this chapter is to examine the relationship between foreign direct investment (FDI) and regional integration in Southeast Asia. This examination is made in the context of the Association of Southeast Asian Nations (ASEAN), which has been moving rapidly towards a higher degree of integration since the inception of the ASEAN Free Trade Area (AFTA) in January 1993. More specifically, the focus is on the ASEAN-5 member countries – namely Indonesia, Malaysia, the Philippines, Singapore and Thailand – as adequate data is not readily available for the other ASEAN members.