An Investigation of the Determinant Factors of Indonesia Domestic Investment: An Analysis of the Q1 2010 to Q4 2018 Period
1AD Tombolotutu, 2MA Djirimu, 3Nurul Ufaira, 4Ika Rafika
1Abdul Azis Lamadjido University, Indonesia
2,3,4Departement of Economics & Development Studies, Tadulako University, Indonesia,
https://doi.org/10.47191/jefms/v7-i6-13
ABSTRACT:
The aim of this research is to investigate the impact of inflation, credit interest rates, exchange rates, and labor on domestic investment (PMDN) in Indonesia. Using secondary time series data from government institutions such as the Investment Coordinating Board, Central Statistics Agency, and Central Bank of Indonesia, the research examined these macroeconomic variables from Q1 2010 to Q4 2018. Quantitative data analysis, including multiple regression and models such as Autoregressive Conditional Heteroscedasticity (ARCH) and Generalized Autoregressive Conditional Heteroscedasticity (GARCH), was used to determine the relationship between the independent and dependent variables. The findings indicate that exchange rates and labor have a positive as well as significant impact on PMDN, while credit interest rates have a negative and significant impact. The effect of inflation on PMDN was found to be negative and insignificant. The research concludes that using the best model of E-GARCH, inflation, credit interest rates, exchange rates, and labor affect PMDN in Indonesia.
KEYWORDS:
Inflation, Credit Interest Rates, Exchange Rates, Labor, PMDN
JEL Classification:
E62, F33, G00, O11
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