Determinants of Energy Consumption, Foreign Direct Investment, and Economic Growth in Indonesia

Idra Wirdoni Putra () and Hasdi Aimon
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Idra Wirdoni Putra: Universitas Negeri Padang
Hasdi Aimon: Universitas Negeri Padang

A chapter in Proceedings of the 10th Padang International Conference on Education, Economics, Business and Accounting (PICEEBA-10 2022), 2025, pp 491-506 from Springer

Abstract: Abstract This study examines energy consumption, foreign direct investment, and economic growth, along with the factors influencing these variables in Indonesia. It adopts a descriptive and associative approach, utilizing a simultaneous equation regression model analyzed through the Two-Stage Least Squares (2SLS) method. The endogenous variables include energy consumption, foreign direct investment, and economic growth, while the exogenous variables consist of population density, industrialization, GDP per capita, inflation, exports, and education. The findings reveal the following: (1) Population density, industrialization, and GDP per capita have a positive and significant impact on energy consumption in Indonesia; (2) Energy consumption and exports positively and significantly influence foreign direct investment, whereas inflation has a negative but insignificant effect on foreign direct investment; (3) Energy consumption, foreign direct investment, and education positively and significantly contribute to economic growth in Indonesia.

Keywords: energy consumption; investment; economic growth; population density; industrialization; GDP; inflation; exports; education (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-839-4_42

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DOI: 10.2991/978-94-6463-839-4_42

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