The Role of Corruption Control in the Impact of Bank Credit on Foreign Direct Investment: Evidence from Bayesian Analysis

Abstract

This study investigates the impact of bank credit on foreign direct investment (FDI) in ASEAN countries, with a particular focus on the moderating role of corruption control. The research employs Bayesian estimation methods to analyze the proposed model. The findings reveal that bank credit has a positive effect on FDI, with a 97% probability of this relationship holding true. Moreover, corruption control significantly amplifies the positive impact of bank credit on FDI, with near certainty. In addition, the results show that economic growth positively influences FDI, while the unemployment rate has a negative effect. These findings offer valuable policy implications for ASEAN countries, highlighting the importance of promoting bank credit in conjunction with effective corruption control measures to enhance FDI attraction.