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All Journal International Journal of Management Research and Economics
Anak Agung Ayu Kirana Wulandari
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Decision Sciences, Operations Research & Management Economics, Econometrics & Finance

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Institutional Quality and Foreign Direct Investment in Indonesia Anak Agung Ayu Kirana Wulandari; Ida Ayu Meisthya Pratiwi
International Journal of Management Research and Economics Vol. 3 No. 2 (2025): May : International Journal of Management Research and Economics
Publisher : Institut Teknologi dan Bisnis (ITB) Semarang

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.54066/ijmre-itb.v3i2.3390

Abstract

Foreign Direct Investment (FDI) plays a vital role in supporting economic growth in developing countries like Indonesia. Despite its vast market potential and abundant resources, Indonesia’s FDI inflows lag behind those of neighboring countries. This study analyzes the impact of institutional quality on FDI in Indonesia during the 2002–2023 period, focusing on six indicators: voice and accountability, political stability, government effectiveness, regulatory quality, rule of law, and control of corruption. A quantitative approach is employed to assess the relationship between these variables. The results show that political stability and voice and accountability are the most influential factors in attracting FDI, as they foster a stable and transparent investment climate. This study emphasizes the importance of institutional reform to enhance investor confidence and support long-term economic growth.
Co-Authors Ida Ayu Meisthya Pratiwi