Electricity consumption and foreign direct investment: Empirical evidence from Indonesia

Over the last three decades, most of developing countries pay more attention to foreign direct investments (FDI) activities, at both national and international level. Economists believe that FDI is one of the most important sources of globalization and an important catalyst for economic growth, espe...

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Main Author:	Putri Khairani,
Format:	Thesis
Language:	eng eng
Published:	2017
Subjects:	HB Economic Theory HG Finance
Online Access:	https://etd.uum.edu.my/6964/1/s821596_01.pdf https://etd.uum.edu.my/6964/2/s821596_02.pdf
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id	my-uum-etd.6964
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Abdul Razak, Nor Azam
topic	HB Economic Theory HG Finance
spellingShingle	HB Economic Theory HG Finance Putri Khairani, , Electricity consumption and foreign direct investment: Empirical evidence from Indonesia
description	Over the last three decades, most of developing countries pay more attention to foreign direct investments (FDI) activities, at both national and international level. Economists believe that FDI is one of the most important sources of globalization and an important catalyst for economic growth, especially for the developing countries. FDI can be one of the sources of capital to stimulate the economy of the country, as well as a contributor to the national development through the transfer of an asset, generators of employment, high productivity, competitiveness, management, and technology spillovers. However, deficiency in quality and a limited quantity of electricity is one of the issues that remains a perpetual bugbear that hampering Indonesia’s economic and social development. The objective of this study is to investigate whether electricity consumption affects the inflow of FDI in Indonesia. The analysis is based on Autoregressive Distributed Lag (ARDL) model using time series annual data from 1980-2016 of FDI, electricity consumption, and other macroeconomic variables such as GDP, exchange rate, openness, labor force, and education expenditure as control variables. Using various econometric techniques like Unit Root Test, Bounds Test, Cointegrating and long-run test and Granger causality test, it was found that there are a long-run relationship and positive correlation between electricity consumption and FDI in Indonesia. However, Granger causality result shows that there is no causality running from FDI to electricity consumption and vice versa.
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Putri Khairani, ,
author_facet	Putri Khairani, ,
author_sort	Putri Khairani, ,
title	Electricity consumption and foreign direct investment: Empirical evidence from Indonesia
title_short	Electricity consumption and foreign direct investment: Empirical evidence from Indonesia
title_full	Electricity consumption and foreign direct investment: Empirical evidence from Indonesia
title_fullStr	Electricity consumption and foreign direct investment: Empirical evidence from Indonesia
title_full_unstemmed	Electricity consumption and foreign direct investment: Empirical evidence from Indonesia
title_sort	electricity consumption and foreign direct investment: empirical evidence from indonesia
granting_institution	Universiti Utara Malaysia
granting_department	School of Economics, Finance & Banking
publishDate	2017
url	https://etd.uum.edu.my/6964/1/s821596_01.pdf https://etd.uum.edu.my/6964/2/s821596_02.pdf
_version_	1747828137470722048
spelling	my-uum-etd.69642021-08-18T05:45:09Z Electricity consumption and foreign direct investment: Empirical evidence from Indonesia 2017 Putri Khairani, , Abdul Razak, Nor Azam School of Economics, Finance & Banking School of Economics, Finance and Banking HB Economic Theory HG Finance Over the last three decades, most of developing countries pay more attention to foreign direct investments (FDI) activities, at both national and international level. Economists believe that FDI is one of the most important sources of globalization and an important catalyst for economic growth, especially for the developing countries. FDI can be one of the sources of capital to stimulate the economy of the country, as well as a contributor to the national development through the transfer of an asset, generators of employment, high productivity, competitiveness, management, and technology spillovers. However, deficiency in quality and a limited quantity of electricity is one of the issues that remains a perpetual bugbear that hampering Indonesia’s economic and social development. The objective of this study is to investigate whether electricity consumption affects the inflow of FDI in Indonesia. The analysis is based on Autoregressive Distributed Lag (ARDL) model using time series annual data from 1980-2016 of FDI, electricity consumption, and other macroeconomic variables such as GDP, exchange rate, openness, labor force, and education expenditure as control variables. Using various econometric techniques like Unit Root Test, Bounds Test, Cointegrating and long-run test and Granger causality test, it was found that there are a long-run relationship and positive correlation between electricity consumption and FDI in Indonesia. However, Granger causality result shows that there is no causality running from FDI to electricity consumption and vice versa. 2017 Thesis https://etd.uum.edu.my/6964/ https://etd.uum.edu.my/6964/1/s821596_01.pdf text eng public https://etd.uum.edu.my/6964/2/s821596_02.pdf text eng public masters masters Universiti Utara Malaysia Akinlo, A. E. (2008). Energy consumption and economic growth: evidence from 11 Sub-Sahara African countries. energy economics, 30(5), 2391-2400. Alam, M. (2013). Coping with blackouts: Power outages and firm choices. In Yale Seminar. http://economics.ucr.edu/seminars_colloquia/ 201314/econometrics/Alam% 20paper% 20for (Vol. 202, No. 203, p. 2014). Aliber, R. Z. (1970). Speculation in the flexible exchange revisited. Kyklos, 23(2), 303-314. Aliber, R. Z. (1971). The multinational enterprise in a multiple currency world. The multinational enterprise, 49-56. Antweiler, W., Copeland, R. B., & Taylor, M. S. (2001). Is free trade good for the emissions: 1950-2050. 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Electricity consumption and foreign direct investment: Empirical evidence from Indonesia

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