The Causality of FDI Inflow and Economic Growth in Indonesia

Nurrachmi Rininta

MPRA Paper from University Library of Munich, Germany

Abstract: The causal relationship of FDI inflow and GDP growth has pros and cons in several studies. A Positive relationship between these two variables is conventionally supported by some empirical studies though there are still conflicting view of causality of FDI inflow and economic growth. This study explore the causal relationship between FDI inflow and GDP growth in Indonesia from the period of year 1970 – 2010 which can contribute to the welfare of the population. Cointegration approach will be used to analyse the time series equation the relationship between FDI inflow and economic growth in Indonesia.

Keywords: FDI Inflow; economic growth; Cointegration (search for similar items in EconPapers)
JEL-codes: A10 (search for similar items in EconPapers)
Date: 2011
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