Determinan Aliran Investasi Asing Langsung Ke Indonesia

Abstract

The economy of a country is largely determined by the flow of capital or investment that enters the economic chain. Investment can accelerate the development of infrastructure that supports supply distribution and provides capital to increase production output. The increase in the flow of foreign investment in particular can replace the role of foreign debt for developing countries such as Indonesia which are trying to continue to carry out economic development. This study aims to analyze the effect of inflation, the composite stock price index, foreign exchange reserves, and government spending on the flow of foreign direct investment to Indonesia in 2000-2021 using the Ordinary Least Square (OLS) analysis tool. The results in this study state that foreign exchange reserves have a positive effect on foreign direct investment, while the composite stock price index has a negative effect on foreign direct investment. Meanwhile, inflation and government spending were found to have no effect on foreign direct investment into Indonesia. Based on these results, the government is expected to be able to maintain economic stability in Indonesia so that the targeted economic growth can be achieved and the position of national foreign exchange reserves strengthens every year. Thus, foreign investors will be more interested in investing in Indonesia.