Analysis of the Impact of Economic Factor and Institutional Quality on Economic Growth of APEC Member Countries

The Covid-19 pandemic has significantly impacted the economies of APEC member countries. This impact has been influenced by a paradigm shift in institutional quality. Although there were shift in institutions before the pandemic, it is suspected that the change in institutional paradigms has been more pronounced post-pandemic. Therefore, post-pandemic economic recovery must also prioritize institutional quality aspects. This study aims to analyze the influence of economic factors, including Foreign Direct Investment (FDI), Consumer Price Index (CPI), and taxes, as well as institutional quality factors, including the Voice and Accountability Index (VAA) and Rule of Law Index (RoL), on economic growth of APEC member countries from 2017-2022. The study employs panel data regression analysis using a fixed effect model approach, incorporating dummy variables to distinguish between the pre-and-post Covid-19 periods. The findings indicate that among both economic and institutional quality factors, only Foreign Direct Investment and Consumer Price Index show significant positive results both before and after the Covid-19 pandemic. Governments in APEC member countries need to open opportunities for Foreign Direct Investment and maintain the stability of goods and services post-pandemic to stimulate economic growth. Improving institutional quality post-Covid-19 is necessary to foster economic growth, which is expected to achieve economic growth in the future.