The Influence Of Foreign Direct Investment On Indonesia Economic Growth: Inclusive Or Exclusive?

Arvianda, Khairunisa Maynora and Badrudin, Rudy (2022) The Influence Of Foreign Direct Investment On Indonesia Economic Growth: Inclusive Or Exclusive? IOSR Journal of Economics and Finance (IOSR-JEF), 13 (2). pp. 45-50. ISSN e-ISSN: 2321-5933, p-ISSN: 2321-5925

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Abstract

Background: A country needs inclusive economic development to growth. Inclusive economic development is a development with these principles: pro-growth, pro-job, pro-poor, pro-equality and pro-environment. Government of Indonesia opens up great opportunity for foreign investors to invest in Indonesia in order to increase Indonesia economic growth. This study aims to know and to analyze the impact of foreign direct investment to economic growth in Indonesia whether it is an exclusive growth or inclusive growth. This research use economic growth as an intervening variable. Income distribution inequality, open unemployment rate, and human development index as development direction of exclusive or inclusive growth measurement. Materials and Methods: This study using a panel data from 33 provinces of Indonesia from 2015 to 2019. All data were taken from Statistics Indonesia. Path analysis is used to analyze the variables with SmartPLS3 Software. Results: The results shows that (1) Foreign direct investments has positive and not significant effect on economic growth in Indonesia. (2) Economic growth has negative and significant effect on income distribution inequality, (3) Economic growth has negative and not significant effect on open unemployment, (4) Economic growth has negative and not significant effect on human development index. (5) Foreign direct investment that had been received are still has effect on exclusive growth. Conclusion: Foreign Direct Investment (FDI) only has effect on the changes of inequality income distribution. It means FDI could only solve the inequality problems while for other variables it has no effect. The FDI that had been received by the government still has effect on economic growth only exclusively

Item Type:	Article
Uncontrolled Keywords:	foreign investments, economic growth, exclusive growth, inclusive growth
Subjects:	MANAJEMEN > Manajemen Keuangan
Divisions:	Dosen STIE YKPN > Artikel > Jurnal
Depositing User:	Unnamed user with email webmaster@stieykpn.ac.id
Date Deposited:	29 Mar 2023 03:33
Last Modified:	30 Mar 2023 02:24
URI:	http://repositorybaru.stieykpn.ac.id/id/eprint/757

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