The effect of institutional quality on private investment in Asia Countries

Abstract

The research topic “Impact of institutional quality on private investment in Asian countries” uses the public data set of 41 Asian countries on the World Bank from 2002 - 2019. Through panel data regression, using the General Least Squares model (GLS) and the theory of institutions, the study assesses the impact of institutional quality on private investment in Asian countries. The new point is the Principal Components Analysis (PCA) method for 06 institutional indicators; the study concludes that institutions, Foreign Direct Investment (FDI), and inflation positively impact private investment. In contrast, public investment and the interaction variable FDI and institutions hurt private investment. The industrial index variable is also a new point of the study, but there is no evidence of the impact of this factor on private investment.