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Foreign direct investment in Indonesia and its role to economic growth (vector autoregressive model approach)

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Author: 
Siti Hodijah, Syamsurijal Tan,Haryadi and Syaparuddin
Abstract: 

This study aimed to analyze Foreign Direct Investment (FDI) and relationship with economic growth with the other problems: First, the influence of foreign investment in Indonesia to economic growth in the long term, second, how the relationship between Foreign Investment and economic growth in Indonesia, and third, how the response due to changes in foreign investment to economic growth. This study uses analysis of Vector Autoregressive Model (VAR). The results of this research note that cointegration (relationship) of foreign investment to economic growth in the long term, foreign investment has positive influence on economic growth, and changes in foreign investment fluctuated, to return to normal and improve growth economy takes 6 years.

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               Prof. Dr. ISMAIL YILDIRIM

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