Muhammad Fawaiq
The study aims to analyze the causal relationship between the inflow of FDI from Japan (FDIJ), FDI from South Korea (FDIK), the outflow of remittances from Indonesia to Japan (RJ), the outflow of remittances from Indonesia to Korea (RK) and Indonesia’s economic growth (GDP). The method used in this research is the time series data regression with Vector autoregression (VAR) estimation. The results showed that FDIK and RK had a significant effect on GDP. In contrast, FDIJ and RJ are insignificant in influencing GDP. Other variables do not significantly influence FDIJ, while FDIK is influenced by RK and RJ and GDP. This indicates that the remittances generated by Koreans in Indonesia are a critical factor in determining the decision of Korean investors to invest in Indonesia. Meanwhile, for Japan, the remittances of Japanese workers in Indonesia are significantly influenced by FDIJ, which means that Japanese investment in Indonesia has significantly boosted the remittances of Japanese workers in Indonesia. In addition, GDP influences all of these variables (FDIJ, FDIK, RJ, and RK). In other words, Indonesia's economic growth has become essential in attracting investors from both countries and encouraging increased remittances from foreign workers from Korea and Japan in Indonesia. © 2024, Economic Laboratory for Transition Research. All rights reserved.
Faculty of Economics, Universitas Negeri Jakarta, Indonesia
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