BazEkon - The Main Library of the Cracow University of Economics

BazEkon home page

Main menu

Author
Syukri Adya Utami (STIE Tri Dharma Nusantara, Makassar, Indonesia), Hasanuddin Basri (Hasanuddin University, Makassar, Indonesia), Paddu Abdul Hamid (Hasanuddin University, Makassar, Indonesia), Suhab Sultan (Hasanuddin University, Makassar, Indonesia)
Title
Impact of Government Spending and Corruption on Foreign Direct Investment in Indonesia
Source
Research Papers in Economics and Finance, 2022, vol. 6, nr 1, s. 34-45, rys., tab., bibliogr. 35 poz.
Keyword
Korupcja, Inwestycje zagraniczne, Wzrost gospodarczy, Polityka makroekonomiczna
Corruption, Foreign investment, Economic growth, Macroeconomic policy
Note
summ.
Country
Indonezja
Indonesia
Abstract
Investment is a critical macroeconomic variable for economic growth and development in any country. As a developing country with the fourth largest population in the world, Indonesia is also dependent on investment coming in from both home and abroad. A good investment climate is one of the solutions in overcoming economic problems so that foreign investors can invest in Indonesia. Obviously, various factors influence investors' willingness to invest in Indonesia. !e purpose of this study is to examine the impact of government spending, corruption, economic growth and wages on foreign direct investment in Indonesia. !e study uses Ordinary Least Square (OLS) multiple linear regression analysis for the research period 2000-2020. !e results show that the variables of government spending, corruption and economic growth have positive and significant impact on foreign direct investment, while the variable of salary has negative and significant impact on foreign direct investment. !e Indonesian government needs to reduce the level of corruption and wage level to attract investors.(original abstract)
Full text
Show
Bibliography
Show
  1. Al-Sadig, A. (2009). !e effects of corruption on FDI inflows. Cato Journal, 29(2), 267-294.
  2. Argandoña, A. (2006). Working Paper "e United Nations convention against corruption and its impact on international companies Antonio Argandoña *. 3(656), 1-20.
  3. Asiamah, M., Ofori, D., & Afful, J. (2019). Analysis of the determinants of foreign direct investment in Ghana. Journal of Asian Business and Economic Studies, 26(1), 56-75. https://doi.org/10.1108/jabes-08-2018-0057.
  4. Bayar, Y., & Alakbarov, N. (2016). Corruption and Foreign Direct Investment Inflows in Emerging Market Economies. Ecoforum, 5(2), 303-308.
  5. Biglaiser, G., & Jr, K. D. (2006). Economic reforms and inflows of foreign direct investment in Latin America. Latin American Research Review. https://www.jstor.org/ stable/3662784.
  6. Brima, S., & Brima, A. S. (2017). Monetary Policy Effect on Private Sector Investment: Evidence from Sierra Leone. International Journal of Economics and Financial Issues, 7(1), 476-488.
  7. Castro, C., & Nunes, P. (2013). Does corruption inhibit foreign direct investment? Revista Política, 51(1). https://doi.org/10.5354/0716-1077.2013.27418.
  8. Dewata, B. K., & Swara, I. W. Y. (2013). Pengaruh Total Ekspor, Libor, dan Upah Tenaga Kerja Terhadap Investasi Asing Langsung di Indonesia. E-Jurnal Ekonomi Pembangunan Universitas Udayana, 2, 350-358.
  9. Egger, P., & Winner, H. (2005). Evidence on corruption as an incentive for foreign direct investment. European Journal of Political Economy. https://www.sciencedirect. com/science/article/pii/S0176268005000194.
  10. Epaphra, M., & Massawe, J. (2017). !e effect of corruption on foreign direct investment inflows: Evidence from a panel of Asia-Pacific countries. Turkish Economic Review, 4(1), 19-54. https://doi.org/10.1016/B978-0-08-101109-6.00003-4.
  11. Faroh, A., & Shen, H. (2015). Impact of Interest Rates on Foreign Direct Investment : Case Study Sierra Leone Economy. International Journal of Business Management and Economic Research, 6(1), 124-132.
  12. Gasanova, A., Medvedev, A. N., & Komotskiy, E. I. (2017). !e assessment of corruption impact on the inflow of foreign direct investment. AIP Conference Proceedings, 1836(June). https://doi.org/10.1063/1.4981951.
  13. Gerschewski, J. (2013). !e three pillars of stability: Legitimation, repression, and cooptation in autocratic regimes. Democratization, 20(1), 13-38. https://doi.org/10.1 080/13510347.2013.738860.
  14. Hayami, H., Nakamura, M., & ... (2012). Wages, overseas investment and ownership: implications for internal labor markets in Japan. "e International Journal of .... https://www.tandfonline.com/doi/abs/10.1080/09585192.2011.637070.
  15. Hossain, S. (2016). Foreign direct investment (FDI) and corruption: Is it a major hindrance for encouraging inward FDI? African Journal of Business Management, 10(10), 256-269. https://doi.org/10.5897/ajbm2016.8032.
  16. Jayachandran, G., & Seilan, A. (2010). A causal relationship between trade, foreign direct investment and economic growth for India. International Research Journal of Finance and Economics, 42(January 2020), 74-88.
  17. Kakoti, D. (2019). An Empirical Investigation of India's Outward Foreign Direct Investment: A Macro Perspective. Emerging Economy Studies, 5(2), 79-88. https:// doi.org/10.1177/2394901519870764.
  18. Krogstrup, S., & Matar, L. (2005). Foreign Direct Investment, Absorptive Capacity and Growth in the Arab World. HEI Working Paper, 02(2005), 1-21.
  19. Kubo, A. (2019). A note on determinants of Japanese foreign direct investment in Southeast Asia, 2008-2015. Economic Analysis and Policy, 62, 192-196. https://doi. org/10.1016/j.eap.2019.03.003.
  20. Le, M., & Suruga, T. (2005). "e Effects of FDI and Public Expenditure on Economic Growth : From "eoretical Model to Empirical Evidence GSICS Working Paper Series "e Effects of FDI and Public Expenditure on Economic Growth : From "eoretical Model to Empirical Evidence Manh Vu Le T. January 2005.
  21. Mokuolu, J. O. (2018). Effect of Exchange Rate and Interest Rate on Fdi and Its Relationship With Economic Growth in Nigeria. 33-47. https://doi.org/10.5281/zenodo.1168515.
  22. Montagna, C., & Molana, H. (2005). C ENTRE FOR D YNAMIC M ACROECONOMIC A NALYSIS Expansionary Effects of the Welfare State in a Small Open Economy *. 44(0).
  23. Myint, U. (2000). Corruption: Causes, consequences and cures. Trends in Organized Crime, 3(1), 109-111. https://doi.org/10.1007/s12117-997-1155-3.
  24. Na, L., & Lightfoot, W. S. (2006). Determinants of foreign direct investment at the regional level in China. Journal of Technology Management in China, 1(3), 262-278. https://doi.org/10.1108/17468770610704930.
  25. Okafor, H. O. (2012). Do Domestic Macroeconomic Variables Matter for Foreign Direct Investment Inflow in Nigeria ? 3(9).
  26. Othman, N., Andaman, G., Yusop, Z., & Ismail, M. M. (2018). Impact of public expenditures on FDI inflows into developing countries. Pertanika Journal of Social Sciences and Humanities, 26(2), 751-768.
  27. Quazi, R., Vemuri, V., & Soliman, M. (2014). Impact of Corruption on Foreign Direct Investment in Africa. International Business Research, 7(4). https://doi.org/10.5539/ ibr.v7n4p1.
  28. Sadik, A. T., & Bolbol, A. A. (2001). Capital flows, FDI, and technology spillovers: Evidence from Arab countries. World Development, 29(12), 2111-2125. https://doi. org/10.1016/S0305-750X(01)00083-3.
  29. Shahzad, A., & Al-Swidi, A. K. (2013). Effect of macroeconomic variables on the FDI inflows: !e moderating role of political stability: An evidence from Pakistan. Asian Social Science, 9(9), 270-279. https://doi.org/10.5539/ass.v9n9p270.
  30. Siddiqui, H. A. A., & Aumeboonsuke, V. (2014). Role of Interest Rate in Attracting the Fdi : Study on Asean 5 Economy. International Journal of Technical Research and Applications, 2(1), 59-70.
  31. Smarzynska, B. K., & Wei, S. J. (2000). Corruption and composition of foreign direct investment: Firm-level evidence. nber.org. https://www.nber.org/papers/w7969.
  32. Thirafi, M. A. Z. (2013). Pengaruh Pertumbuhan Ekonomi, Ketersediaan Tenaga Kerja, Infrastruktur Dan Kepadatan Penduduk Terhadap Penanaman Modal Asing Di Kabupaten Kendal. Economics Development Analysis Journal, 2(1). https://doi. org/10.15294/edaj.v2i1.1000.
  33. Ul Husnain, M. I., Khan, M., ul Haq Padda, I., Akram, N., & Haider, A. (2011). Public Spending, Foreign Direct Investment and Economic Growth. International Research Journal of Finance and Economics, 61(June 2014), 20-28.
  34. Umar, U. O., & Alabede, A. B. (2017). !e Impact of Capital Expenditure on Foreign Direct Investment in Nigeria. Journal of Finance and Accounting, 22(11), 18-23. https://doi.org/10.11648/j.jfa.20170504.17.
  35. United Nations Conference on Trade and Development (UNCTAD). (2017). Trade and Development Report 2017. Beyond Austerity: Towards a Global New Deal (Issue September). https://unctad.org/en/PublicationsLibrary/tdr2017_en.pdf.
Cited by
Show
ISSN
2543-6430
Language
eng
URI / DOI
http://dx.doi.org/10.18559/ref.2022.1.3
Share on Facebook Share on Twitter Share on Google+ Share on Pinterest Share on LinkedIn Wyślij znajomemu