Interaction Of Economic Activities with Political Stability and Corruption In ASEAN-5

Abstract

One area that needs to be researched regarding economic activity is the ASEAN region. This is because these countries work together to create progress and achieve prosperity so that ASEAN economic activities have an impact on global economic activities, therefore the region's contribution to the global economy is expected to have a calculable influence. In addition, political conditions and economic activity are interrelated. Good political conditions can support economic activity. Corruption can also affect economic activity. Low levels of corruption can support economic activity, but conversely, higher levels can disrupt economic activity. Corruption can affect economic growth by increasing business costs through bribery prices, management costs from negotiations with officials, and risks from various unclean activities. The research objective of this study is to examine and analyze the interaction of economic activity, political stability, and corruption in ASEAN-5. The method used is VAR for the period 2010-2022. The estimation results show that political stability shows a negative response in the second period, followed by a positive response until the thirteenth period in economic growth. Political stability is positively affected by unemployment and negatively by trade openness. Corruption in the public sector is responded positively by unemployment.