The Causal Nexus Between Foreign Direct Investment and Economic Growth in Indonesia: An Autoregressive Distributed Lag Bounds Testing Approach

The nexus between foreign direct investment and economic growth has long been among the most debated issues in macroeconomics. Some studies find a positive link two factors, but others no evidence. This current research fills gap by analysing causal Indonesia for period 1970-2018. as developing country is one of largest recipients FDI flow; hence study on impact very much important. employs contemporary time-series procedure, involving several unit-root tests namely Augmented-Dickey-Fuller (ADF), Phillips-Perron (PP), Kwiatkowski-Phillips-Schmidt-Shin (KPSS), Lee-Strazicich (LS), an Auto-Regressive-Distributed-Lag (ARDL) bounds-testing method cointegration, Granger causality test. findings provide evidence long-run short-run direction from GDP to FDI. In contrast, generates only relationship GDP. test confirms finding ARDL that there unidirectional running