2023
DOI: 10.21098/bemp.v25i4.1674
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Foreign and Private Domestic Investments in Indonesia: Crowding-in or Crowding-Out?

Abstract: This study aims to investigate the empirical relationship between Foreign Direct Investment (FDI) to Private Domestic Investment (PDI) in Indonesia by using quarterly data from 1990Q2 to 2020Q2. It tests the crowding-in effect (which suggests complementarity between FDI and PDI) and crowding out effect (which indicates asubstitution effect between FDI and PDI) at the sectoral level. Our results imply the prevalence of the crowding-in effect in the primary and secondary sectors, with the tertiary sector exhibit… Show more

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Cited by 2 publications
(3 citation statements)
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“…Exploring the relationship between FDI and domestic investment in Indonesia [ 35 ], examined Indonesia's FDI and private domestic investment relationship from 1990 to 2020. Their observations revealed a sectoral level crowding-in effect in primary and secondary sectors, while the tertiary sector showed a neutral association.…”
Section: Literature Reviewmentioning
confidence: 99%
See 1 more Smart Citation
“…Exploring the relationship between FDI and domestic investment in Indonesia [ 35 ], examined Indonesia's FDI and private domestic investment relationship from 1990 to 2020. Their observations revealed a sectoral level crowding-in effect in primary and secondary sectors, while the tertiary sector showed a neutral association.…”
Section: Literature Reviewmentioning
confidence: 99%
“… BRICS countries [ 33 ] 1988–2020 FDI inflow significantly increases domestic investment in BRICS countries, necessitating strategies to enhance FDI to boost domestic investment. Indonesia [ 35 ] 1990–2020 In Indonesia, the primary and secondary sectors witness a crowding-in impact of FDI on domestic investment, whereas the tertiary sector demonstrates neutrality. MENA countries [ 38 ] 1981–2017 FDI in MENA countries has a long-term positive impact on domestic investment, especially between 2001 and 2017.…”
Section: Literature Reviewmentioning
confidence: 99%
“…Maka dari itu produk gerabah di desa Plancungan yang dihasilkan sering dibeli oleh sebagian orang yang mengerti betul bahwa dalam sejarahnya memang secara kualitas tanpa keraguan. Konteks ini yang kemudian dianggap masuk ke ranah sektor kompetitif sebagai kekuatan menuju the export market (Setiyanto, 2022). Artinya produksi gerabah sebagai bagian nilai lokal mampu dikenalkan di masyarakat luas tanpa harus berpusar di lingkungan domestik saja.…”
Section: Faktor Pendukung Eksistensi Gerabah Plancunganunclassified