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The Impact of Foreign Direct Investment (FDI) and Financial Development
towards Business Start-Ups
Yeo Siew Kuan
Supervisor: Dr. Suhal Kusairi
Bachelor of Economics (Natural Resource)
School of Social and Economic Development
The objective of this study is to analyze the impact of the foreign direct investment
(FDI) and financial development towards business start-ups. This study employed a
static panel data model and used data of ten ASEAN countries from year 2011 until
year 2016. The result stated that FDI had a positive impact on cost to start a business.
Conversely, the domestic credit to private sector has a negative impact on cost to start
a business. As the cost to start a business decrease leads to the business start-up’s
growth, therefore, implied that financial development that represented by domestic
credit to private sector supported the business start-ups growth, and implicitly
financing factor could motivate the growth of entrepreneurship in ASEAN countries.
1380 | UMT UNDERGRADUATE RESEARCH DAY 2018