The Role of Political Stability and Foreign Direct Investment in Indonesia's Economic Growth

Authors

  • Yosef Yepta Kristofano Department of Development Economics, University of Bengkulu
  • Ratu Eva Febriani Department of Development Economics, University of Bengkulu

DOI:

https://doi.org/10.55927/ajabm.v3i3.10680

Keywords:

Political Stability, FDI, Economic Growth

Abstract

This study aims to determine how the role of political stability and foreign direct investment to economic growth in indonesia. This study also aims to examine the influence of political stability and foreign direct investment (FDI) in playing an important role in economic growth in 34 provinces in Indonesia for the period 2018-2022. The method used in this study is a quantitative research method using secondary data in the form of panel data. The analysis tool used is panel regression. It was found that the positive relationship between political stability, Foreign Direct Investment (FDI), has a very important role for economic growth in Indonesia.

Downloads

Download data is not yet available.

References

Abate, C. A. (2022). The relationship between aid and economic growth of developing countries: Does institutional quality and economic freedom matter? Cogent Economics and Finance, 10(1). https://doi.org/10.1080/23322039.2022.2062092

Abdul Basit, dkk. (2021). Analisis Pengaruh Stabilitas Politik dan Faktor Ekonomi Terhadap Indeks Harga Saham Gabungan. Jurnal Akademi Akuntansi, 5(2), 220-237.

Alesina, A., & Perotti, R. (1996). Income distribution, political instability, and investment. European Economic Review, 40(6), 1203–1228. https://doi.org/10.1016/0014-2921(95)00030-5

Armah, S. (2010). Does political Stability Improve the Aid-Growth Relationship? A panel evidence on selected Sub-Saharan African countries. African Review of Economics and Finance, 2(1), 54–76.

Asiedu, E. (2006). Foreign Direct Investment in Africa: The Role of Natural Resources, Market Size, Government Policy, Institutions and Political Instability. The World Economy, 29(2301466), 63–77. http://doi.wiley.com/10.1111/j.1467-9701.2006.00758.x

Badan Pusat Statistik. 2024. Diakses pada 28 Maret 2024.

Bank, W., & National, O. (2023). GDP (current US$). The World Bank Group. https://data.worldbank.org/indicator/NY.GDP.MKTP.CD

Bari, Mohd Abdul.2013. Foreign Direct Investment and Economic Growth in Bangladesh and India : A Comparative Study. South Asian Journal of Management, Vol. 20: 7-37.

Dabour, N. M. (2000). The Role of Foreign Direct Investmen (FDI) in Development and Growth in Oic Member Countries. Journal of Economic Cooperation, 21, 27–55.

Fery Dona. (2017). Peran Penanaman Modal Asing (PMA) dalam Pembangunan Ekonomi di Era Otonomi Daerah. Jurnal Ilmu Syariah dan Hukum, 2(1), 2527-8169, 79-90.

Firdaus Jufrida, dkk. (2016). Analisis Pengaruh Investasi Asing Langsung (FDI) dan Investasi Dalam Negeri Terhadap Pertumbuhan Ekonomi Indonesia. Jurnal Perspektif Ekonomi Darussalam, 2(1), 2502-6976, 54-68.

Florennica, E., & Febriani, R. E. (2023). Do Financial Deepening, Government Spending, and Unemployment Benefit Poverty Reduction in Indonesia. Jurnal Ekonomi Pembangunan, 20(2), 193-204.

Jhingan, M.L. 2004. Ekonomi Pembangunan dan Perencanaan, Edisi 1 cetakan Ke-10. Jakarta: PT Grafindo Persada.

Kuncoro, Mudrajad. 2003. Metode Riset Untuk Bisnis dan Ekonomi. Jakarta : Erlangga.

Margolis, J. E. (2010). Understanding political stability and instability. Civil Wars, 12(3), 326–345. https://doi.org/10.1080/13698249.2010.509568.

Masruroh. (2020). Pengaruh Tingkat Pengangguran Terbuka Terhadap Pertumbuhan Ekonomi di Jawa Timur.

Munyta Mentari, Abdul Hadi Ilman, Didi Suwardi. (2017). Pengaruh Foreign Direct Investment (FDI) Terhadap Pertumbuhan Ekonomi Di Nusa Tenggara Barat Tahun 2010-2014. Jurnal Ekonomi dan Bisnis Indonesia, 2(2), 69-77.

Panayotou, T. (1998). Instruments of Change, Motivating and Financing Sustainable Development (1st ed.). United Nations Environment Programme. https://doi.org/https://doi.org/10.4324/9781315071053

Perlikowski, Ł. (2021). Political Stability as a Phenomenon and a Potential. Athenaeum Polskie Studia Politologiczne, 72(4), 229–244. https://doi.org/10.15804/athena.2021.72.13

Proborini Hastuti. (2018). Desentralisasi Fiskal dan Stabilitas Politik dalam Kerangka Pelaksanaan Otonomi Daerah di Indonesia. Jurnal Simposium Nasional Keuangan Negara, 784-799.

Salsabila, Amira. 2011. Pengaruh FDI dan Modal Manusia terhadap Pertumbuhan Ekonomi antar Daerah di Indonesia. Depok.

Schumacher, I. (2013). Political stability, corruption and trust in politicians. Economic Modelling, 31(1), 359–369. https://doi.org/10.1016/j.econmod.2012.11.047

Shabbir, M. S., Bashir, M., Abbasi, H. M., Yahya, G., & Abbasi, B. A. (2021). Effect of domestic and foreign private investment on economic growth of Pakistan. Transnational Corporations Review, 13(4), 437–449.

Shalihah, H. F., & Febriani, R. E. (2023). DEMOCRACY AND GOVERNMENT SPENDING: IS THERE A LINK?. Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi (MEA), 7(3), 949-960.

Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. The Quartely Journal of Economics, 70(1), 65–94. http://www.jstor.org/stable/1884513

Sukirno, Sadono. 2000. Makroekonomi Modern : perkembangan pemikiran dari klasik hingga Keynesian baru. Jakarta : Raja Garfindo Pustaka.

Syafaat Fachriza Agma. (2015). Peranan Foreign Direct Investment Terhadap Pertumbuhan Ekonomi Indonesia. 2-13.

Todaro, M. P., & Smith, S. C. (2013). Economic Development (Twelfth Ed). Pearson.

Ulfa, M. A., & Febriani, R. E. (2023). CHINA'S ECONOMIC UNCERTAINTY AND FOREIGN DIRECT INVESTMENT IN INDONESIA. Assets: Jurnal Ekonomi, Manajemen dan Akuntansi, 13(2), 189-207.

Uwubanmwen, A. E., & Ogiemudia, O. A. (2016). Foreign Direct Investment and Economic Growth: Evidence from Nigeria. International Journal of Business and Social Science, 7(3).

Wahiba, Nasfi Fkili. 2014. Impact of Foreign Direct Investment on Economic Growth in Tunisia. Journal Academic Research International, Vol 5: 186-195.

Yusuf, H. A., Shittu, W. O., Akanbi, S. B., Umar, H. M., & Abdulrahman, I. A. (2020). The role of foreign direct investment, financial development, democracy and political (in)stability on economic growth in West Africa. International Trade, Politics and Development, 4(1), 27–46. https://doi.org/10.1108/itpd-01-2020-0002.

Downloads

Published

2024-08-31

How to Cite

Kristofano, Y. Y., & Febriani, R. E. (2024). The Role of Political Stability and Foreign Direct Investment in Indonesia’s Economic Growth. Asian Journal of Applied Business and Management, 3(3), 261–276. https://doi.org/10.55927/ajabm.v3i3.10680

Issue

Section

Articles