Relationship between Export, Import, Foreign Direct Investment and Economic Growth in Indonesia

Abstract

This study aims to analysis the relationship between export, import, foreign direct investment and economic growth using time series data during 1980 to 2017 in Indonesia. This paper applied vector error correction model (VECM) to estimate the relationship between variables. The empirical results showed that foreign direct investment have significant effect to economic growth in Indonesian economy. Meanwhile, in the short run there were not significantly affect between export and import to economic growth in Indonesian economy. In model specification, the model was invalid because insignificantly coeficient of error correction term.