ABSTRACT
This chapter presents a static structural model empirical analysis of the impact of Foreign direct investment (FDI) and its spillover effects on the economic growth of the Association of Southeast Asian Nations-5 economies. It describes the hypothesis and methodology, and analyses the results of the static empirical analysis. The chapter presents a hypothesis based on the positive spillover effects of FDI in the theory of international production. The hypothesis tests the impact of the FDI inflows on economic growth. As the FDI inflows increase, the variable used for its measurement increases. The hypothesis tests the impact of learning by doing on economic growth. Learning by doing is proxied by annual manufacturing value added as a percentage ratio of Gross Domestic Product. In assessing the impact of FDI on growth, the regressions are made on the single equation model to examine the relationship between the FDI spillover effects variables and the growth of real per capita domestic output.
