Because the Association of Southeast Asian Nations (ASEAN) is a major emerging market which has attracted significant flows of foreign direct investment (FDI), this study briefly examines the host country determinants of FDI into ten developing countries in the region. Using a panel dataset containing information of FDI flows from 1991 to 2007, this paper establishes the determinants of FDI inflows to ASEAN: GDP (PPP) per capita, international trade, exchange rate depreciation, inflation rate, and corruption freedom. Consistent with the prediction of the proposed hypotheses, the findings indicate that GDP (PPP) per capita, international trade, and depreciation of domestic currency is important determinants of FDI to encourage the inflow FDI into ASEAN with statistical significance. However, inflation rate which is employed to represent the economic stability of the region has negative impact on FDI. Interestingly, corruption freedom which is approximated to institutional quality of the host countries is not only an important factor but it is the major promoted factor. From a policy point of view, ASEAN’s governments should increase the level of GDP (PPP) per capita and international trade, depreciate exchange rate, keep inflation rate stable, and particularly improve the corruption freedom in order to keep their competencies in attracting inflow FDI.

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