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The Causality of FDI Inflow and Economic Growth in Indonesia

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  • Rininta, Nurrachmi

Abstract

The causal relationship of FDI inflow and GDP growth has pros and cons in several studies. A Positive relationship between these two variables is conventionally supported by some empirical studies though there are still conflicting view of causality of FDI inflow and economic growth. This study explore the causal relationship between FDI inflow and GDP growth in Indonesia from the period of year 1970 – 2010 which can contribute to the welfare of the population. Cointegration approach will be used to analyse the time series equation the relationship between FDI inflow and economic growth in Indonesia.

Suggested Citation

  • Rininta, Nurrachmi, 2011. "The Causality of FDI Inflow and Economic Growth in Indonesia," MPRA Paper 46572, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:46572
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    References listed on IDEAS

    as
    1. Balasubramanyam, V N & Salisu, M & Sapsford, David, 1996. "Foreign Direct Investment and Growth in EP and IS Countries," Economic Journal, Royal Economic Society, vol. 106(434), pages 92-105, January.
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    More about this item

    Keywords

    FDI Inflow; economic growth; Cointegration;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General

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