FAKTOR PENENTU PENANAMAN MODAL ASING DI DAERAH (STUDI KASUS PROVINSI DI INDONESIA)

• Main Authors: , SAFAAT TRI WIDODO, , Prof. Tri Widodo ,M.Ec.Dev., Ph.D
• Format: Theses and Dissertations NonPeerReviewed
• Published: [Yogyakarta] : Universitas Gadjah Mada 2013
• Subjects: ETD
• Online Access: https://repository.ugm.ac.id/125701/; http://etd.ugm.ac.id/index.php?mod=penelitian_detail&sub=PenelitianDetail&act=view&typ=html&buku_id=65875
• Institution: Universitas Gadjah Mada

Foreign Direct Investment (FDI) is one of the important elements in enhancing the economic growth of developing countries, including Indonesia. The opportunities came from the economic crisis experienced by developed countries in Europe and the United States that increasing the volatility of capital flows to emerging market countries should be optimized by the Indonesian government. Issues such as lack of realization value of FDI infows (2% of GDP) and investment destination locations that are still concentrated in Java Economic Corridor demonstrates that goverment need more efforts for the improvement and equalization of foreign direct investment (FDI) inflows in Indonesia. This study aims to analyze the regional determinants of Foreign Direct Investment (FDI) in Indonesia so w can know what are the factors that influence the selection of a region/province as an investment destination. Tobit models are used in estimating the factors that are considered influential as market size proxied by GDP per capita (LnPDRB), infrastructure in the form of a high ways (LnJALAN) , labor costs (LnWAGE) and the human capital represented by the school enrollment rate (EDUC) from 33 provinces in Indonesia during the period of year 2008-2011. The analysis showed that market size and infrastructure has positive and significant effect on the flows of Foreign Direct Investment in the region/province in Indonesia. While labor costs and human capital has no effect on the flows of Foreign Direct Investment in Indonesia. Provinces that have a GDP per capita and infrastructure such as better roads become more attractive for foreign investment compared to other regions. This suggests that the market-seeking orientation is still the main motivation of foreign investors who undertake an investment in the region/province in Indonesia. In addition, quality in transportation infrastructure is also considered as a dominant factor in the selection of investment location.