Determinants of Domestic Direct Investment in Indonesia: Islamic Economic Approach

Iva Faizah, Muhammad Iqbal Fasa, Suharto Suharto, Dhidhin Noer Ady Rahmanto, Fauzul Hanif Noor Athief

Abstract


The aim of this research is to analys the influence of Domestic Direct Investment (DDI) to Economic Growth in Indonesia (GDP) with Capital Expenditures as moderating variable. We use panel data with 9 years of observation (2010-2018) and 30 provinces in Indonesia, based on purposive sampling, secondary data and analyzed by MRA (Moderated Regression Analysis). The results indicates that, DDI actually gives negative effect on economic growth in Indonesia it was because of them is worth the investment in the country is still low when compared with foreign investment and investment out of the country, and greater fluctuations in value realization of these investments annually. Capital expenditure has proved to strengthen and change the direction of the relationship between the DDI to the GDP, due to the realization that capital spending is focused in the development of infrastructure.


Keywords


DDI, MRA, Stedy Growth

Full Text:

PDF

References


Adisasmita, R. (2014). Growth region & growth area, Yogyakarta: Graha Ilmu.

________, (2013). Theories of Economic Development "Economic Growth and Regional Growth". Yogyakarta: Graha Ilmu.

Aldin, IU, BKPM Record Realization of Foreign Investment in the Third Quarter Plummeted 20%, Akses: 17 Agustus 2019, https://katadata.co.id/berita/2018/10/30/bkpm-catat-realisasi-investasi-asing-kuartal-iii-anjlok-20

Apriana, D., Suryanto, R. (2010). Analysis of the Relationship Between Capital Expenditures, Original Regional Revenues, Regional Independence and Regional Economic Growth (Studies in Regencies and Cities in Java-Bali), Journal of Accounting and Investment, 11(1), 68-79.

Arsyad, L. (2010). Economic development, UPP STIM YKPN, Ed.5, Yogyakarta.

Badan Pusat Statistik. (2019). Monthly Report on January Socio Economic Data.

________. (2017). Gross Regional Domestic Product of Provinces in Indonesia by 2012-2016 Business Field.

________. (2017). Monthly Report on Socio Economic Data, February.

Bakari, S. (2018). The Impact of Domestic Investment on Economic Growth: New Policy Analysis from Algeria, Bulletin of Economic Theory and Analysis, 3(1), 35-51.

________. (2017). The Impact of Domestic Investment on Economic Growth: New Policy Analiysis From Algeria, Munich Personal RePEc Archive, MPRA Paper No. 80053.1-18.

Booth, A., (1998). The Indonesian Economy in the Nineteenth and Twentieth Centuries: A History of Missed Opportunities, Macmillan, Basingstoke

Dewi, SR., & Wardani, S. (2017). Effect of PMA, PMDN, and PAD on Economic Growth, Journal of Accounting and Business, 3(1), 187-199.

Dick, H. et al. 2002. Emergence of a National Economy: An Economic History of Indonesia 1800–2000, University of Hawai’i Press, Honolulu.

Eng, PVD. (2010), The Sources Of Long-Term Economic Growth In Indonesia: 1880–2008, Explorations In Economic History, 47, 294–309.

Fasoranti, MD. (2012). The Effect of Government Expenditure on Infrastructure on the Growth of the Nigerian Economy 1977-2009, International Journal of Economics and Financial Issues, 2(4), 513-518.

Ghozali, I. (2011). Multivariate Analysis Application with Programs IBM SPSS 19, Semarang: UNDIP.

Hasnul, AG. (2016). The Effects Of Government Expenditure On Economic Growth: The Case Of Malaysia, Munich Personal Pepec Archive, MPRA Paper No. 71254, 1-15.

Huda, N., & Muhammad H. (2010). Islamic Financial Institutions Theoretical and Practical Review, Jakarta: Kencana Prenada Media Group.

Ismail, M., Santoso, DB., Yustika, AE., & Sallama, NI. (2014). Indonesian Economic System Interpretation of the Pancasila and the UUD 1945. Jakarta: Penerbit Erlangga.

Jaeni, G., & Anggana, L. (2016). Economic Growth as a Variable Moderating Regional Revenue and Specific Allocation Funds for Capital Expenditures, Proceedings of the Multi-Disciplinary National Seminar Seminar & Call For Papers Unisbank (Sendi_U) Unisbank Semarang, 692-702.

Indonesian republic's finance ministry, Access: 25 Agustus 2019, https://www.kemenkeu.go.id/publikasi/laporan/laporan-keuangan-pemerintah-pusat/.

Indonesian republic's finance ministry, Access: 26 Agustus 2019, https://www.kemenkeu.go.id/apbn2016.

Khaliq, A., & Noy, I. (2007). Foreign Direct Investment and Economic Growth: Empirical Evidence from Sectoral Data in Indonesia, New Economics Papers, 1-27.

Kuncoro, M. (2011). Quantitative Method, Yogyakarta: UPP STIM YKPN.

Mohamed, MR., & Singh, KSJ., & Liew, CY. (2013). Impact of Foreign Direct Investment & Domestic Investment on Economic Growth of Malaysia, Malaysian Journal of Economic Studies 50(1), 21-35.

Muhammad. (2014). Sharia Bank Fund Management, Jakarta: PT. Raja Grafindo Persada.

Nugroho, F., & Rohman, A. (2012). The Effect of Capital Expenditures on Growth in Regional Financial Performance with Local Own Revenues as Intervening Variables (Case Study in Central Java Province), Diponegoro Journal of Accounting, 1(2), 1-14.

Posumah, F. (2015). Effect of Infrastructure Development on Investment in Southeast Minahasa Regency, Jurnal Berkala Ilmiah Efisiensi, 15(2), 1-16.

Rizky, LR., Agustin, G., & Mukhlis, I. (2016). The Effects of Foreign Investment, Domestic Investment and Capital Expenditures on the Economic Growth of Provinces in Indonesia, Journal of Economics and Development Studies, 8(1), 9-16.

Sasana, H. (2008). Analysis of Factors Affecting Private Investment in Central Java, JEJAK: Jurnal Ekonomi dan Kebijakan, 1(1), 1-10.

Sihombing, J. (2009). Investment Law in Indonesia, Penerbit PT. Alumni Bandung.

Sondakh, GY, et. al. (2017). The Effect of Regional Government Capital Expenditures and Private Investment on Job Opportunities and Economic Growth in Manado City (2006-2015), Jurnal Berkala Ilmiah Efisiensi, 17(1), 146-156.

Solow, RM. (1957) “Technological Change and the Aggregate Production Function,”

Review of Economics and Statistics, 39(3), 312-320.

Sukirno, S. (2015). Ekonomi Pembangunan Proses, Masalah, dan Dasar Kebijakan, Jakarta: Prenada Media Group.

Sundrum, RM. (1986). Indonesia'S Rapid Economic Growth: 1968–81, Bulletin of Indonesian Economic Studies, 22(3), 40-69.

Thurik, R., & Sander W. (1999). Linking Entrepreneurship and Economic Growth, Small Business Economics, 13, 27-55.

Todaro,MP., & Smith, SC. (2011). Economic Development 9th Edition, Jakarta: Erlangga.

Undang-Undang No 25 Tahun 2007 About concerning Investment

Wahyuning, S., & Rakasiwi, S. (2014). Analysis of Factors Affecting Domestic Investment in Central Java Province, Jurnal Ilmiah Komputerisasi Akuntansi, 7(2), 1-9.

Wertianti, GIGA., & Dwirandra, AANB. (2013). Effect of Economic Growth on Capital Expenditures with PAD and DAU as Moderation Variables, E-Jurnal Akuntansi Universitas Udayana, 4(3), 567-584.




DOI: https://doi.org/10.15294/jejak.v12i2.20973

Refbacks

  • There are currently no refbacks.




Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.