Riana Raudha Adni
Faculty of Economics, Universitas Negeri Jakarta, Indonesia

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Dynamics of Foreign Direct Investment Manufacturing Sector in Indonesia Saparuddin Mukhtar; Dicky Iranto; Riana Raudha Adni
Jurnal Pendidikan Ekonomi Dan Bisnis (JPEB) Vol 7 No 2 (2019): Jurnal Pendidikan Ekonomi & Bisnis (DOAJ & SINTA 2 Indexed)
Publisher : Faculty of Economics, State University of Jakarta.

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (301.284 KB) | DOI: 10.21009/JPEB.007.2.7

Abstract

This research was conducted to determine the short-term and long-term effects between Gross Domestic Product, Interest Rates, and Inflation on Foreign Direct Investment in the manufacturing sector for the period 2004-2017. Study applied VECM (Vector Error Correction Model), secondary data obtained from Bank Indonesia, BPS, and Bappenas. Based on the statistical results it can be concluded that: first, GDP has a positive and not significant effect in the short term, then in the long run, it has a negative effect toward FDI. Second, in the short term interest rates have a negative and not significant while in the long term interest rates have a negative and significant effect on FDI in the manufacturing sector. Lastly, inflation has a negative and insignificant effect, while, in the long-run inflation has a positive and significant effect on FDI in the manufacturing sector.