Economic Environment Effect: Foreign Investment Variables, Exports and Dollar Exchange Rates

Abstract

The increase of foreign debt can be affected by inter-state trade in which there are foreign investment, exports, and imports. The value of foreign investment, exports, and imports of a country is affected by the dollar exchange rate. This study aims to test empirically the influence of foreign investment, exports and imports of foreign debt with the dollar exchange rate as an intervening variable. The data used in this study are secondary data which is available at Bank of Indonesia (BI), The Ministry of Finance, UNCTAD FDI / TNC database and BPS data from 1986 to 2017. The data analysis technique used is path analysis. Based on the results of the analysis, foreign investment variables, exports and dollar exchange rates do not directly affect foreign debt, but imports directly affect foreign debt. Dollar exchange rate as an intervening variable for export and import variables has an indirect influence on foreign debt in Indonesia in from 1986 to 2017, while foreign investment variable on foreign debt of dollar rate does not become an intervening variable.