Causality Relationship between Foreign Direct Investment, Trade and Economic Growth in Indonesia

Muhammad Alhasymi Matondang

2018

Abstract

The aim of this paper is to analyse the relation between foreign investment, economic growth, and trade in Indonesia. using secondary data in the form of time series data from 1981 to 2017. Data is obtained from the World Bank website. For data analysis using vector autoregression (VAR) method. Stationary data at first difference and cointegrated. Thus, the vector error correction (VECM) model is used to analyze the short and long-term relationships of each variable. The results obtained are that there are no significant variables in the short term and obtained significant long-term effects of FDI, export and import variables on GDP in Indonesia. After a causality test, the conclusion is that the FDI variable has a one-way causality relationship to the variables GDP, exports and imports. The import variable has a one-way causality relationship to GDP and exports. Meanwhile, the import variable has a one-way causality relationship with exports.

Paper Citation

in Harvard Style

Matondang M. (2018). Causality Relationship between Foreign Direct Investment, Trade and Economic Growth in Indonesia.In Proceedings of the 1st Unimed International Conference on Economics Education and Social Science - Volume 1: UNICEES, ISBN 978-989-758-432-9, pages 485-491. DOI: 10.5220/0009503004850491

in Bibtex Style

@conference{unicees18,
author={Muhammad Alhasymi Matondang},
title={Causality Relationship between Foreign Direct Investment, Trade and Economic Growth in Indonesia},
booktitle={Proceedings of the 1st Unimed International Conference on Economics Education and Social Science - Volume 1: UNICEES,},
year={2018},
pages={485-491},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0009503004850491},
isbn={978-989-758-432-9},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 1st Unimed International Conference on Economics Education and Social Science - Volume 1: UNICEES,
TI - Causality Relationship between Foreign Direct Investment, Trade and Economic Growth in Indonesia
SN - 978-989-758-432-9
AU - Matondang M.
PY - 2018
SP - 485
EP - 491
DO - 10.5220/0009503004850491