Dampak Ekonomi Makro terhadap Inward Forect Direct Investment (FDI) di Indonesia

Muhammad Ubaidillah Almustofa, Imron Mawardi, Tika Widiastuti, Raditya Sukmana, Puput Rosita Febrianti

Abstract


This study examines the risks associated with investing in Indonesia, as well as the impact of foreign direct investment (FDI) on the country's macroeconomy. It uses the autoregressive distributed lag (ARDL) method to analyze the short-term and long-term relationship between macroeconomic variables and FDI inflows. The study utilizes annual time series data spanning from 1984 to 2015. The exchange rate is critical in the short term because it has an inverse effect on foreign direct investment (FDI). On the other hand, factors like inflation, GDP growth risk, and economic and political concerns have a major impact on foreign direct investment (FDI) over a long period of time. Financial factors, however, do not exhibit long-term cointegration with FDI. Prudent international investors prioritize the instability of macroeconomic variables to optimize profits on invested funds, highlighting the necessity of government regulation over these variables to enhance foreign direct investment inflows. This study contributes to the current body of work regarding the influence of country risk on foreign direct investment (FDI) inflows into Indonesia.


Keywords


Country Risk; Macroeconomic; Foreign Direct Investment; economic risk

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DOI: http://dx.doi.org/10.12962/j24433527.v17i1.20201

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