Ms. Andi Nurhikmah Daeng Cora, from International Business, Binus University International UG program presented his paper “The Relationship between Foreign Direct Investment, Export and GDP Growth in Indonesia” and “The Impact of Export, Imports, and Exchange Rates on Economic Growth in Indonesia” at the 5th IMHA Conference at Jakarta, Indonesia on September 04, 2018
This paper is an attempt to investigate the relationship between foreign direct investment, export, and GDP growth in Indonesia using Vector Error Correction Model (VECM) for the period 1981-2015. The result suggests that there is a relationship between foreign direct investment, GDP growth and export for Indonesia. The Vector Error Correction Model shows that there is long run and short run causality running from FDI and GDP to export. The model is very significant and well specified because the residuals of the regressions have no auto correlation. The results of this research is very important for policy-makers’ decisions in determining the appropriate strategies and policies because FDI and export are one of the most significant factors of economic growth in Indonesia.
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