THE RELATIONSHIP BETWEEN FOREIGN DIRECT INVESTMENT, EXPORT AND GDP GROWTH IN INDONESIA

Abstract

This paper is an attempt to investigate the relationship between foreign direct investment,
export, and GDP growth in Indonesia using Vector Error Correction Model (VECM) for the
period 1981-2015. The result suggests that there is a relationship between foreign direct
investment, GDP growth and export for Indonesia. The Vector Error Correction Model shows
that there is long run and short run causality running from FDI and GDP to export.