2019
DOI: 10.24843/jekt.2019.v12.i01.p05
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Foreign Direct Investment and Economic Growth In Indonesia: A Causality Analysis

Abstract: This study analyse the causality relationship between foreign direct investment (FDI) and economic growth in Indonesia over the period 1970-2015. The method used in this research is Granger causality approach. Results from the estimation show that there is no causal relationship between FDI and economic growth in short and long run. However, the results in this paper indicate that there is a unidirectional causal relationship running from economic growth to FDI in short and long run. It means that economic gro… Show more

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Cited by 3 publications
(4 citation statements)
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“…In the classical theory of economic growth, capital is the main factor for driving the Gross Regional Domestic Product (GRDP). Capital can come from investment both from within the country and from abroad (Fazaalloh, 2019). One of the important benchmarks in determining the success of economic development is the increase in the Gross Regional Domestic Product (GDP), which illustrates a real impact from the implemented development policies.…”
Section: Effect Of Agricultural Sector Investment On Absorption Of La...mentioning
confidence: 99%
“…In the classical theory of economic growth, capital is the main factor for driving the Gross Regional Domestic Product (GRDP). Capital can come from investment both from within the country and from abroad (Fazaalloh, 2019). One of the important benchmarks in determining the success of economic development is the increase in the Gross Regional Domestic Product (GDP), which illustrates a real impact from the implemented development policies.…”
Section: Effect Of Agricultural Sector Investment On Absorption Of La...mentioning
confidence: 99%
“…Transportation variables have a positive effect with FDI inflows (Sajilan et al, 2019;Hana et al, 2018). The most commonly used variables in researching FDI is Gross Domestic Product (GDP) which has a positive influence on FDI as done by (Hana et al, 2018;Fazaalloh, 2019;Sajilan et al, 2019;Razmi & Behname, 2012, Khamis et al, 2015Rahayu et al, 2017;Cahyaningsih, 2015;Khondoker & Kaliapa, 2010;Horas et al, 2019).…”
Section: Theoretical Reviewmentioning
confidence: 99%
“…Exchange rate is one of the vareabels used in the Granger Causality Test model to analyze the reciprocal influence with FDI, where there is no exchange rate and FDI causality relationship (Meftah & Abdelkader, 2019). The causality relationship between GDP and FDI in previous research states that there is a causality that is in the same direction between GDP and FDI (Hana et al, 2018;Fazaalloh, 2019) Institutional Skin Relations are negatively related to FDI inflows (Sajilan at al., 2019) but Abdelkarim & Mariem (2015) states institutional indicators are positively related to FDI.…”
Section: Theoretical Reviewmentioning
confidence: 99%
“…Investment is one of the determining factors in efforts to increase a country's economic growth. (Faazuloh, 2019). The investment is supported by clear regulation and should also be demonstrated through the administration of business licensing administration processes.…”
Section: Introductionmentioning
confidence: 99%