The Determinants of FDI Location Choice in Indonesia
This study examines the determinants of FDI location choice by using firm level data of 8,010 foreign firms in Indonesia during the period 2001-2009. This study divided FDI business fields into 3 sectors, which are the primary sector, the secondary sector, and the tertiary sector. Using conditional...
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| Main Authors: | , |
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| Format: | Theses and Dissertations NonPeerReviewed |
| Published: |
[Yogyakarta] : Universitas Gadjah Mada
2013
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| Subjects: | |
| Online Access: | https://repository.ugm.ac.id/123685/ http://etd.ugm.ac.id/index.php?mod=penelitian_detail&sub=PenelitianDetail&act=view&typ=html&buku_id=63799 |
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| Institution: | Universitas Gadjah Mada |
| Summary: | This study examines the determinants of FDI location choice by using firm
level data of 8,010 foreign firms in Indonesia during the period 2001-2009. This
study divided FDI business fields into 3 sectors, which are the primary sector, the
secondary sector, and the tertiary sector. Using conditional logit estimation, this
study found that in the primary sector, regional GDP growth, infrastructure, and
labor quality play a significant role. But, surprisingly, regional GDP growth and
labor quality show a negative significant role, which is in contrast to the existing
literature. In the secondary sector, infrastructure and labor quality play a positive
significant role and real minimum wage plays a negative significant role, while in
the tertary sector, regional GDP growth shows a positive significant role in
deciding FDI location. For in all sectors, these findings suggest that the
probability of a region will be selected by an investor is affected by the regional
GDP growth, infrastructure condition, labor quality, and real minimum wage of a
region. |
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