The Role of Economic Globalization and Institutions on Regional Inequality in ASEAN Countries

The purpose of this study is to analyze the influence of economic and institutional globalization on regional inequality that occurs in ASEAN. Regional inequality in this study uses theil index and economic globalization in this study uses the KOF Globalization index. Meanwhile, from an institutional perspective, the corruption perception index and the policy quality index are used. This study also includes foreign investment, per capita income, and government spending on education. The model used in this study is panel data analysis using a fixed effect model for 8 ASEAN countries during 2012-2019. The results of the study found that economic globalization has a positive effect on regional inequality. From the institutional aspect, the corruption perception index has a significant positive relationship to regional inequality, while policy quality has a negative relationship to regional inequality. From the findings in this study, it is hoped that the governments of ASEAN countries can improve the regulatory quality, which encourages an increase in per capita income and equal distribution of education to reduce regional inequality.