Open AccessForeign Direct Investment and Economic Growth In Indonesia: A Causality Analysis
Author(s) -
Al Muizzuddin Fazaalloh
Publication year - 2019
Publication title -
jurnal ekonomi kuantitatif terapan
Language(s) - English
Resource type - Journals
eISSN - 2303-0186
pISSN - 2301-8968
DOI - 10.24843/jekt.2019.v12.i01.p05
Subject(s) - foreign direct investment , causality (physics) , granger causality , economics , short run , monetary economics , macroeconomics , international economics , econometrics , physics , quantum mechanics
This study analyse the causality relationship between foreign direct investment (FDI) and economic growth in Indonesia over the period 1970-2015. The method used in this research is Granger causality approach. Results from the estimation show that there is no causal relationship between FDI and economic growth in short and long run. However, the results in this paper indicate that there is a unidirectional causal relationship running from economic growth to FDI in short and long run. It means that economic growth influences FDI inflows in Indonesia.