Foreign Direct Investment And Regional Economic Growth In Indonesia: A Panel Data Study

Nury Effendi () and Femmy Soemantri ()
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Femmy Soemantri: Department of Economics, Padjadjaran University

No 200305, Working Papers in Economics and Development Studies (WoPEDS) from Department of Economics, Padjadjaran University

Abstract: The main objective of this study is to determine the effects of foreign direct investment on economic growth of twenty-six provinces in Indonesia during 1987-2000 using panel data analysis. Quantitative and qualitative analysis were used in this research. Qualitative analysis describes the foreign direct investment in Indonesia. Panel data analysis with fixed effect method was used as a quantitative analysis to capture the main objective of this research. The results of this study are : (1) Foreign Direct Investment in Indonesia is positively correlated with the economic growth, although it is not statistically significant; (2) The factors that promote foreign direct investment in Indonesia are domestic investment; private consumption, export, import, and education; (3) There is a complementary relationship between foreign direct investment and domestic investment; (4) The quality of human resources gives a strong effect on economic growth and foreign direct investment.

Keywords: Foreign Direce Investment; growth; Indonesia (search for similar items in EconPapers)
JEL-codes: R11 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2003-07, Revised 2003-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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