The Analysis of Indonesia’s Nickel Export Affecting the Dynamic of Foreign Direct Investment (FDI) inflows in Indonesia: Multiple Regression Analysis

Abstract

Indonesia is a major player in the global nickel market, with the country's nickel exports accounting for a significant percentage of its total exports. Despite this, Indonesia has experienced fluctuations in its foreign direct investment (FDI) inflows in recent years. The purpose of this study is to explore the relationship between Indonesia's nickel export and FDI inflows. By understanding the dynamics of FDI in Indonesia, policymakers can better design policies that support economic growth and attract investment to the country. The study used time series data from 1990 to 2021, with the research objects being Indonesia and FDI. The variables analyzed included FDI, Percentage of Total Exports that are Nickel, Nickel Export Value, and Nickel Export Volume. The research method was the OLS regression method with multiple regression analysis, including unit root and classical assumption tests. The result of the study shows that the percentage of total exports that are nickel has a significant negative effect on FDI inflows, while Indonesia's nickel exports value and nickel export volume being positively significant influential factors on FDI inflows in Indonesia.