Does Good Governance Good for Business: Insight from ASEAN+3

This study investigates the impact of good governance on the ease of doing business in ASEAN+3 countries (ASEAN nations plus China, Japan, and South Korea) using the Panel Corrected Standard Error (PCSE) method for panel data analysis. The research examines six governance indicators and their influence on business environment metrics like the ease of starting a business. The combined panel and cluster analyses reveal significant disparities in the economic environments of the ASEAN+3 region. Cluster 1 (Cambodia, Laos, Myanmar) faces challenges with low EoDB scores, poor governance, and high corruption, requiring substantial reforms. Clusters 3 and 4 (Japan, Malaysia, China, Thailand, South Korea, Singapore) benefit from strong governance, effective legal frameworks, and high productivity, illustrating the positive impact of robust institutions and political stability. The panel data analysis highlights the crucial role of government effectiveness, rule of law, and productivity in enhancing economic performance, while political instability and corruption significantly hinder outcomes, underscoring the need for political and institutional reforms.