Corresponding Author: Farrah Dina Abd Razak, Universiti Teknologi MARA Perak Branch Tapah Campus, farra104@uitm.edu.my 89 International Journal of Undergraduate Research 1 (2): 89-94, 2019 e-ISSN: 2682-8189 © RMP Publications, 2019 DOI: 10.26666/rmp.ijur.2019.2.13 Does Investment Inflows Matter for Country’s Economic Performance? Evidence from Static Panel Data Aiman Hakimi Mohd Sapudi 1 and Farrah Dina Abd Razak 2 1 Faculty of Accountancy, Universiti Teknologi MARA, Perak Branch, Tapah Campus, Perak, Malaysia, 2 Faculty of Business and Management, Universiti Teknologi MARA, Perak Branch, Tapah Campus, Perak, Malaysia. Abstract: Macroeconomic objective for every country is to achieve ideal economic performance and it can be measured by analyzing growth of Gross Domestic Product (GDP). The aim of this empirical article is to explore the factors that determine GDP in ASEAN-5 countries over a period of 1998 to 2018 using static panel data analysis. Pooled Ordinary Least Square, Random Effect and Fixed Effect models were regress and result shows that Fixed Effect model is the most appropriate model to estimate factors determine GDP in ASEAN-5 countries. The results demonstrate that foreign direct investment (FDI) and labour productivity are the most significant variables; while trade openness, inflation rate, and population growth have no significant effect on GDP for ASEAN-5 countries. This article is significant because it contributes to the literature on factors influences GDP by encompassing the scope of previous studies. Key words: foreign direct investment, gross domestic product, labour productivity, population growth, panel data analysis, ASEAN-5 INTRODUCTION ASEAN is an acronym for The Association of Southeast Asian Nations, a regional corporation of ten most inclusive emerging and developing Asian countries with each distinguished by a significant influence in global economy. It consists of Malaysia, Indonesia, Thailand, Philippines, Vietnam, Cambodia, Myanmar, Laos, Singapore and Brunei Darussalam. ASEAN has applicable policies to promote the flow of FDI into their respective countries, especially to sectors with multiple investments. Strong investments inflows on manufacturing, services and infrastructure industries were came from China, the Netherlands, Germany, Switzerland and Australia. In 2017, the ASEAN countries attracted 20 percent of the global FDI and contributed 25 percent of global GDP. If ASEAN is form as a single country, it would be the third largest market in the world behind India and China with 630 million of population [1]. FDI flows to ASEAN rose from USD 123 billion in 2016 to USD137 billion in 2017 with a rise in investments in five member states namely Indonesia, Thailand, Philippines, Singapore and Malaysia. This ASEAN-5 countries share several common features. First, these five member states are working together to form the ASEAN Exchanges that aims to promote ASEAN capital markets and to offer more opportunities to investors in the region. Second, these countries have relatively huge amount of young populations as compared to other developed countries and its labour market is evolving towards more mobility for skilled professionals in the region. On the other indicator, combined FDI inflows to the four CLMV countries (Cambodia, Laos, Myanmar and Vietnam) grasped a greatest level in 2017, increasing by 21 per cent to USD23 billion, accounting for 17 per cent of total FDI flows in ASEAN. Vietnam was the third largest recipient within ASEAN behind Indonesia and Singapore. This hike contributed by these region rapidly growing industry clusters include health care, research and development (R&D) activities, e- commerce, automotive and the electronics. For