Foreign Direct Investment and Human Development in Indonesia

SABRINA KIASATI, Dr. A. Erumban

2022 | Skripsi | S1 MANAJEMEN

This thesis is created as a part of the Bachelor's Thesis IB course to analyze the impact of foreign direct investment inflows on human development in regions of Indonesia. The research will be conducted using fixed effects panel-data regression using data from 34 provinces in Indonesia.

After the release of the first Human Development Report by the UNDP in 1990, more researchers are stressing the importance of people at the center of development. To measure the extent of progress in human development, UNDP summarized three aspects of human development: education, life expectancy, and living standards into a measure as the human development index (HDI). In a search on how the HDI can be enhanced, this research analyzed the effect of inward foreign direct investment (FDI) on the HDI of regions in Indonesia using panel-data regression (fixed-effects model) from regional data in 34 provinces of Indonesia over the period of 2010 to 2018. The results show a positive and significant impact of foreign direct investments on the human development index in provinces of Indonesia and all of HDI dimensions.

Kata Kunci : human development, human development index (HDI), foreign direct investment (FDI), provinces of Indonesia, FDI spillovers