Determinants of Political Stability to Support Foreign Investment in Indonesia

Abstract

What investors often consider before deciding to invest in various countries is the political situation. The risks faced by investors in the event of political instability are regulatory changes, legal disputes, forced takeovers of companies, disruption to regional stability, policies against acts of terrorism, and changes in state ideology. The purpose of this study is to find a determinant of political stability in Indonesia that will be useful for investors and multinational companies, and the government in maintaining political stability. Systematic secondary data sampling from January 2015 to December 2019 was used for explanatory study purposes and to build a model. This study concludes that the rule of law, control of corruption, and oil prices have a significant effect on political stability in Indonesia, while the inflation rate does not have a significant effect on political stability in Indonesia. The novelty of this research is the formation of a political stability model for Indonesia and why an increase in control of corruption actually has a negative effect on political stability in Indonesia.

The Role of Political Stability in the Context of Esg Models at World Level

“…In fact, to increase the value of PS especially in democratic countries it is necessary to invest in the creation of a culture of institutions and democracy that can also involve a reduction in political conflict in the event of elections. PS, control of corruption, and rule of law are positively associated in the case of Indonesia (Tjandrasa, 2021). There is a negative relationship between party switching and PS in the case of Nigeria (Okolie, 2021).…”

The Role of Political Stability in the Context of ESG Models at World Level

“…In fact, to increase the value of PS especially in democratic countries it is necessary to invest in the creation of a culture of institutions and democracy that can also involve a reduction in political conflict in the event of elections. PS, control of corruption, and rule of law are positively associated in the case of Indonesia [26]. There is a negative relationship between party switching and PS in the case of Nigeria [27].…”

“…[8], [9], [10] , [11], [12] , [13] Ps and Economic Growth and Economic Development [14], [15], [16], [17], [18], [19] , [20] , [21] , [22] , [23] , [24] , [25] PS and Governance [26], [27] , [28] , [29] , [30] , [31] Miscellaneous [32] , [31] , [33] , [34]…”

Marketing Strategy for Indonesian Law Firms to Attract Multinational and Foreign Clients (USLS Law Firm)

“…Political stability in Indonesia affects investor confidence and business operations. [20] Any political unrest or changes in government policies can impact the legal environment. Stability also affects the perception of foreign clients considering Indonesian law firms for legal services.…”