The Effect of Elections and Electoral Violence on Foreign Direct Investment Inflows: Evidence from Cross-Country Data

INTAN KARINA HAPSARI, khmad Akbar Susamto, S.E., M.Phil., Ph.D.

2020 | Skripsi | S1 ILMU EKONOMI

Terlepas dari sejumlah argumen bahwa investasi asing langsung (FDI) tidak memiliki pengaruh yang signifikan terhadap pertumbuhan, studi empiris telah menunjukkan bahwa FDI memang memainkan peran penting dalam ekonomi global. Berbagai faktor diketahui menarik FDI. Ada beragam penelitian dan berbagai literatur yang berfokus pada dan mempertahankan dasar-dasar kekerasan pemilu, kelembagaan, dan internasional, serta faktor- faktor penting terhadap perilaku politik dalam menarik FDI. Namun demikian, ada sedikit penelitian yang meneliti hubungan antara pemilihan umum, kekerasan pemilu dan aliran FDI. Dengan demikian, riset ini bertujuan untuk berkontribusi untuk memenuhi kesenjangan itu dengan mencari untuk menguji efek dari berbagai faktor penentu dalam hal risiko pemilu, berdasarkan pada dataset dan penelitian oleh Pemilu National Elections Across Democracy and Autocracy (NELDA) terhadap FDI di 145 negara di seluruh dunia dan sub-sampel dari negara-negara demokratis dengan menggunakan metodologi analisis data panel dinamis menggunakan metode two-step system generalized methods of moments (GMM) serta analisis data panel dengan metode fixed effects. Hasilnya menunjukkan bahwa pemilu tidak memiliki pengaruh yang signifikan terhadap FDI. Namun, salah satu ukuran kekerasan pemilu memiliki efek yang signifikan terhadap FDI dalam sampel keseluruhan maupun sampel negara-negara demokratis.

Despite the number of arguments that foreign direct investment (FDI) does not have a significant effect towards growth, empirical studies have shown that FDI indeed plays an important role in the global economy. Various factors are known to attract FDI. There has been multiplicity of researches and various literatures that focuses on and pertains the institutional, social, and international underpinnings of electoral violence, as well as important factors towards political behaviors in attracting FDI. Nevertheless, there is a paucity of research that examines the relationship between elections, electoral violence and the flow of FDI. Thus, this research is aimed to contribute in fulfilling that gap by seeking to examine the effect various determinants in terms of electoral risks, based on the dataset and research by National Elections Across Democracy and Autocracy (NELDA) towards Foreign Direct Investment in 145 countries across the globe and a sub-sample of democratic countries by using the methodology of dynamic panel data analysis using two-step system generalized methods of momets (GMM) as well as the panel data analysis by fixed effect method. The result shows that election does not have a significant effect on FDI. However, one of the measures of electoral violence has a significant effect on FDI in the overall sample as well as in the sample of democratic countries.

Kata Kunci : FDI, Elections, Electoral Violence