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Jurnal Ekonomi Malaysia

53 (1) 2019 171 – 185

The Impact of Foreign Direct Investment, Labour Force, and External Debt on Economic Growth in Indonesia and Malaysia
Kesan Pelaburan Langsung Asing, Tenaga Kerja dan Hutang Luar Negara ke atas Kesan Pelaburan Langsung Asing, Tenaga Kerja dan Hutang Luar Negara ke atas Pertumbuhan Ekonomi di Indonesia dan Malaysia

Universitas Sebelas Maret
Jl. Ir. Sutami No.36 A
Pucangsawit Kec. Jebres Kota Surakarta
Jawa Tengah 57126
INDONESIA

malikcahyadin@gmail.com

Fakulti Ekonomi dan Pengurusan
Universiti Kebangsaan Malaysia
43600 UKM Bangi Selangor
MALAYSIA

tamat@ukm.edu.my

Abstract

The study aims to estimate the impact of Foreign Direct Investment (FDI), labour, and external debt on economic growth in Indonesia and Malaysia over the period 1980-2016. The findings are expected to serve as a reference for macroeconomic policies in Indonesia and Malaysia. Employing an Autoregressive Distributed Lag Model (ARDL) and Error Correction Model (ECM), we find that FDI, labour force and external debt have a significant impact on the economic growth in the long- and short- run in both countries. Statistically, the estimated models are stable. Therefore, it is recommended that the authorities in Indonesia and Malaysia should concentrate on attracting more quality FDI inflows and properly manage external debts as well as high-skilled labour force, which are vital to economic growth.

Keywords

ARDL-ECM; economic growth; external debt; FDI; labour force
http://dx.doi.org/10.17576/JEM-2019-5301-14
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Cahyadin, , & Sarmidi, (2019). The Impact of Foreign Direct Investment, Labour Force, and External Debt on Economic Growth in Indonesia and Malaysia. Jurnal Ekonomi Malaysia, 53(1), 171–185. http://dx.doi.org/10.17576/JEM-2019-5301-14

@article{cahyadin2019impact,
  title={The Impact of Foreign Direct Investment, Labour Force, and External Debt on Economic Growth in Indonesia and Malaysia},
  author={Cahyadin, Malik and Sarmidi, Tamat},
  journal={Jurnal Ekonomi Malaysia},
  volume={53},
  number={1},
  pages={171—185},
 

year={2019},
}

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