Foreign Direct Investment, Inclusive Growth, and Institutions in Indonesia

Pande Nyoman Laksmi Kusumawati

    Research output: ThesisThesis fully internal (DIV)

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    Foreign Direct Investment (FDI) is highly important for developing countries like Indonesia, since the domestic savings are insufficient to finance the development. However, the impacts of FDI on host countries’ economies are still debatable. In addition, the existing studies have focused only on the contribution of FDI to economic growth. Focusing only on economic growth in assessing the impact of FDI is indeed too narrow an approach, as empirical evidences indicate that economic growth is often not accompanied by a reduction of income inequality and poverty rates. Therefore, this dissertation proposes to consider a broader perspective of economic growth, the so-called inclusive growth concept in assessing the contribution and the quality of economic policies and business, including FDI. Inclusive growth is growth which benefits all members of society regardless their circumstances. By employing a qualitative method and by observing three regions in Indonesia (Badung, Mojokerto, and Tangerang Districts), this dissertation has found that the impact of FDI on inclusive growth varies among regions. Moreover, this dissertation has found the significant role of inclusive institutions in promoting FDI for inclusive growth. Inclusive institutions ensure that all members of society gain benefits from FDI activities and involve them in FDI-related policies and programs. In addition, in a multilevel government system, inclusive institutions are indicated by the involvement of local governments in public policy process of managing FDI for inclusive growth at the national level. Lastly, the existence of inclusive institutions is highly influenced by the values of society, government and also foreign companies.
    Translated title of the contributionBuitenlandse Directe Investeringen (FDI), Inclusieve Groei en Instellingen in Indonesië
    Original languageEnglish
    QualificationDoctor of Philosophy
    Awarding Institution
    • University of Groningen
    • Herman, Joost, Supervisor
    • Holzhacker, Ron, Supervisor
    Award date12-Jul-2018
    Place of Publication[Groningen]
    Print ISBNs978-94-034-0782-1
    Electronic ISBNs978-94-034-0781-4
    Publication statusPublished - 2018

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