Resilience of FDI Inflows Against Global Economic Shocks: Evidence from BRICS and ASEAN 5 Countries

Abstract

Foreign Direct Investment (FDI) drives emerging markets but faces increasing global volatility due to macroeconomic instability. This study analyzes and compares FDI resilience between BRICS and ASEAN 5 during the Eurozone Crisis (2012–2013) and the COVID-19 pandemic (2019–2020). Using secondary data from the World Bank (2010–2023), this quantitative study explicitly employed an independent sample t-test and Mann-Whitney U test to measure the statistical significance of FDI resilience differences between the two blocs across crisis and post-crisis periods. The results reveal significant divergence: BRICS experienced sharp FDI declines during the pandemic due to structural vulnerabilities like commodity dependence and political instability. Conversely, ASEAN 5 demonstrated stronger adaptability, rebounding rapidly to an average of 2.94% of GDP in the post-crisis period, with Vietnam leading at 4.3% and Indonesia stabilizing at 1.7%. Statistically, while the t-test showed descriptively higher resilience for ASEAN 5 during the initial shock, the Mann-Whitney U test confirmed that ASEAN 5’s FDI recovery was significantly stronger than that of BRICS in the post-crisis period (p < 0.05). Theoretically, this enriches the discussion on FDI resilience against multidimensional crises, proving that dynamic policy resilience can override static market-size advantages. Practically, BRICS requires deeper structural reforms, while ASEAN 5 must sustain fiscal responsiveness and regional integration to maintain momentum. Ultimately, this research provides a practical blueprint for policymakers to design shock-responsive economic frameworks and offers global investors strategic insights for capital allocation and risk mitigation in emerging markets.