Abstract
The purpose of this study is to find the effect of the exchange rate, Gross Domestic Product (GDP), inflation, and the interest rate on Domestic Direct Investment (DDI) in Indonesia. This study uses multiple linear regression models and simple regression in the forms of semi-logarithmic. The data used are secondary data published by Badan Pusat Statistik (Central Statistics Board), in the period of 2000-2018. The results of the semi-logarithmic multiple regression analysis show that partially the Rupiah (IDR)/US $ exchange rate and GDP has a positive but insignificant effect on Domestic Direct Investment (DDI), inflation has a negative but insignificant effect on DDI, while the interest rate regression coefficient has a positive sign (not in accordance with theoretical expectation) and insignificant to DDI in Indonesia during the period of 2000-2018. However, the results of simple linear regression analysis show that the IDR/US $ exchange rate and GDP has a positive and significant effect on DDI in Indonesia in the period of 2000-2018. Each inflation and IDR/US $ exchange rate has a negative and significant effect on DDI in Indonesia during the period of 2000-2018. This study suggests that the government and policymakers of Indonesia need to assess the IDR exchange rate, GDP, inflation, and interest rate, so that they can increase domestic direct investment in Indonesia.
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