ANALYSIS OF THE EFFECT OF ECONOMIC GROWTH AND FOREIGN DIRECT INVESTMENT ON ENVIRONMENTAL DEGRADATION IN ASEAN CASE STUDY 2016 – 2022

Abstract

Development is an important aspect of a country because it impacts the welfare of society. However, environmental degradation is a major problem due to the development process of a country which is generally caused by economic activity. This paper aims to analyze the effect of economic growth and foreign direct investment on environmental degradation, especially in ASEAN. The analysis method used is panel data regression using data of 10 ASEAN members from 2016 to 2022. In this study, environmental degradation is represented by Environmental Performance Index (EPI) data. The results of this study state that economic growth has a significant effect on environmental degradation, while Foreign Direct Investment (FDI) has no significant effect on environmental degradation. This research is expected to contribute to environmental economics.