Determinant Analysis of Foreign Directed Investment in Java Island

Abstract

. The goals of Indonesia's economic development are high economic growth and low poverty rates. One of the factors that support economic progress is Foreign Directed Investment (FDI) because technology transfer can increase the productivity of domestic companies and be able to create job opportunities. Based on BPS data for 2020, Indonesia's FDI is concentrated on the island of Java. The purpose of this study is to find out what factors influence FDI in Java. The object of this research data is the Province of DKI Jakarta, West Java, Central Java, DI Yogyakarta, East Java and Banten. The data used is secondary data published by the Provincial BPS in the period 2012 to 2020 with the sampling technique used is purposive sampling. The research design used inferential statistical analysis with explanatory research methods. The data analysis technique used is the stationary test, model formulation, model suitability test, and hypothesis testing using the F test and T test. The results obtained are that the determinants of FDI in Java are income per capita, Indonesian democracy index, minimum wage and inflation with a magnitude of the effect is 77.268%.