Business, Management, Finance and Economics

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Browsing Business, Management, Finance and Economics by Author "Ahmad, Nurul Afiqah"

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    The attractiveness of ASEAN countries to foreign direct investment in real estate
    (Universiti Teknologi Malaysia, 2016) Ahmad, Nurul Afiqah
    Foreign direct investment has played a significant role in ASEAN economic growth. Foreign direct investment in real estate (FDIRE) however, is relatively new to the real estate sector. In global investment, the competitiveness of a country and its ability to attract and retain investors is one of the main drivers of sustainable economic development. Thus, to describe the bilateral country-specific impacts and the complex multiple criteria decision-making problems in FDIRE, appropriate analytical methods for ASEAN country's attractiveness assessment are required.The aim of this study is to assess the level of country's attractiveness to bilateral FDIRE factors, with emphasis on the ranking of ASEAN countries using hybrid methods of Gravity Model (GM) and Analytical Hierarchy Process (AHP). The GM determines the significant bilateral FDIRE factors in ASEAN-5 countries. Panel data analysis is conducted on ASEAN-5 countries (Malaysia, Indonesia, Philippines, Singapore and Thailand) as host country and eleven source countries for the years 1999-2010. The results show that all explanatory variables are significant except for property prices, real estate transparency, inflation and exchange rate. Then, AHP method is applied to prioritize the set of FDIRE criteria and to rank the ASEAN-5 countries based on significant variables in the GM. The results show that, among the seven significant variables (property registration, common language, infrastructure, market size, interest rate, openness and geographical distance), common language as a sociocultural factor is considered by international investors as most important in determining the attractiveness of a country for FDIRE while interest rate as an economic factor is least important. In general, results for year 2010 show that Singapore and Thailand are the most attractive countries for FDIRE to investors from all countries except from the European Union. Therefore, to attract more bilateral FDIRE into ASEAN countries, each country should improve its socio-culture by enhancing the use of English as global business language in their country, improve its technology by increasing the various components of the country's infrastructure, increase its openness by increasing the total number of import and export, consider economic issues when implementing and introducing new FDIRE. Countries should also expand bilateral FDIRE to a further location and reduce restrictions in real estate registration by reducing the number of procedures, the costs and duration for registering property