Proceedings of the 2nd Padang International Conference on Education, Economics, Business and Accounting (PICEEBA-2 2018)

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Analysis of the Relationship between Credit Rating and Foreign Direct Investment in Indonesia

Authors
Hasdi Aimon, Fajar Akbari
Corresponding Author
Hasdi Aimon
Available Online April 2019.
DOI
10.2991/piceeba2-18.2019.126How to use a DOI?
Keywords
Direct Investment, State Credit Rating Indonesia, Credit Rating Agency.
Abstract

The purpose of studied is to determine whether there is a short-term and long-term influence and cointegration between Foreign Direct Investment, to the credit ratings of Indonesia provided by credit institutions such as Moody's (MO), S & P (SP) and Fitch (FIT). The studied uses secondary time series data from 1998-2016,which consists of data on the amount of direct investment that goes to Indonesia and the credit rating of the State of Indonesia. This research uses the Vector Autoregression (VAR) method which includes Johansen Cointegration test, followed by Vector Error Correction Model (VECM) estimation and also forecasting by Impulse Response Function (IRF) and Forecast Error Variance Decomposition (FEVD) analysis. The result of the VECM test there is two significant negative variables, the Johansen Co-Integration test shows that the four variables are cointegrated. The IRF and FEVD analysis show that the FIT variable has a significant or direct positive effect on the direct investment (FDI), in which the rise of the credit rating of the State of Indonesia may increase the amount of direct investment in Indonesia. While other variables have no effect on direct investment in Indonesia.

Copyright
© 2019, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the 2nd Padang International Conference on Education, Economics, Business and Accounting (PICEEBA-2 2018)
Series
Advances in Economics, Business and Management Research
Publication Date
April 2019
ISBN
978-94-6252-703-4
ISSN
2352-5428
DOI
10.2991/piceeba2-18.2019.126How to use a DOI?
Copyright
© 2019, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

risenwbib
TY  - CONF
AU  - Hasdi Aimon
AU  - Fajar Akbari
PY  - 2019/04
DA  - 2019/04
TI  - Analysis of the Relationship between Credit Rating and Foreign Direct Investment in Indonesia
BT  - Proceedings of the 2nd Padang International Conference on Education, Economics, Business and Accounting (PICEEBA-2 2018)
PB  - Atlantis Press
SP  - 1002
EP  - 1012
SN  - 2352-5428
UR  - https://doi.org/10.2991/piceeba2-18.2019.126
DO  - 10.2991/piceeba2-18.2019.126
ID  - Aimon2019/04
ER  -