Causality of tourism income, foreign direct investment and economic growth in Indonesia

Rohman, Muhammad Habibur and Suyanto, Suyanto and Rosjadi, Firman (2021) Causality of tourism income, foreign direct investment and economic growth in Indonesia. Riset Ekonomi Pembangunan, 6 (1). pp. 51-60. ISSN 2508-0205

PDF Paper Habibur Suyanto Rosjadi 2021.pdf - Published Version Download (307kB)

Abstract

Tourism sector and foreign direct investment in Indonesia are currently in a strategic position that receive a major attention from national as well as international parties. Tourism income and foreign direct investment inflows are largely believed to contribute greatly to the government income, thus increase economic growth of a country. However, the empirical findings on Indonesia are mixed. This current study contributes to the debate in the empirical literature by investigating the short-term and long-term relationship and the direction of causality between international tourism income, foreign direct investment and economic growth in Indonesia from 1995 to 2018. It provides insight into the literature by examining the national level data. Granger causality test is applied. The interesting finding is that foreign direct investment causes the increase in tourism income and in the economic growth. The reverse is also applied that the tourism income attracts foreign direct investment and spur economic growth. These findings support the efforts of the government, business players, and local society in promoting tourism sector in attracting foreign investment as well as promoting economic growth.

Item Type:	Article
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HC Economic History and Conditions H Social Sciences > HJ Public Finance
Divisions:	Faculty of Business and Economic > Department of Economic
Depositing User:	Suyanto 3198
Date Deposited:	24 May 2021 07:01
Last Modified:	24 May 2021 07:01
URI:	http://repository.ubaya.ac.id/id/eprint/39557

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