Analisis Determinan Investasi Asing di Indonesia: Pendekatan Error Correction Model (ECM)

Abstract

Foreign direct investment (FDI) plays an important role in supporting Indonesia's economic growth, yet its inflows have fluctuated considerably due to changes in domestic and global economic conditions. Understanding the macroeconomic factors that influence FDI is therefore essential for designing appropriate investment policies. This study aims to analyze the short-run and long-run effects of Gross Domestic Product (GDP), Human Development Index (HDI), and interest rates on foreign direct investment in Indonesia. The study employs a quantitative approach using annual time-series data from 1990 to 2024. The Error Correction Model (ECM) is applied to capture both short-term dynamics and long-term equilibrium relationships among the variables after conducting stationarity and cointegration tests. The findings indicate that GDP has no significant effect on FDI in the short run but exerts a positive and significant influence in the long run, suggesting that sustained economic growth strengthens Indonesia's attractiveness to foreign investors. In contrast, HDI and interest rates do not significantly affect FDI in either the short or long run. These findings imply that market size remains the primary consideration for foreign investors, while improvements in human development and interest rate fluctuations have yet to become decisive factors in investment decisions.