Empirical Analysis of the Relationship between Corruption, Law Enforcement, Economic Growth, and Foreign Direct Investment in Indonesia
DOI:
https://doi.org/10.58812/wslhr.v1i02.61Keywords:
Corruption, Law Enforcement, Economic Growth, Foreign Direct InvestmentAbstract
The link between corruption, law enforcement, economic progress, and foreign direct investment (FDI) in Indonesia is the subject of an experimental inquiry in this article. When elements like trade openness, human capital, and infrastructure development are considered, such as their effects on economic growth and FDI inflows, the study employs multiple regression analysis to examine the influence of crime and law enforcement on these two variables. The study's findings show that law enforcement and corruption significantly impact Indonesia's FDI inflows and economic growth. Law enforcement has a favorable effect on both economic growth and FDI inflows, while sin has the opposite effect. The findings suggest that reducing crime and bolstering law enforcement are essential to promoting economic growth and enticing foreign investment in Indonesia.
References
Y. Iskandar and U. Kaltum, “The Relationship Between Intellectual Capital and Performance of Social Enterprises: A Literature Review,” 2021.
A. Alfada, “The destructive effect of corruption on economic growth in Indonesia: A threshold model,” Heliyon, vol. 5, no. 10, p. e02649, 2019.
B. D. Lewis and A. Hendrawan, “The impact of majority coalitions on local government spending, service delivery, and corruption in Indonesia,” Eur. J. Polit. Econ., vol. 58, pp. 178–191, 2019.
H. R. Mufti and B. Kanumayoso, “KPK and the commitment of the Indonesian government to eradicate corruption (2004–2014),” Cult. Dyn. a Glob. World, pp. 29–37, 2018.
K. Kinanti, “The Establishment of KPK Supervisory Board towards the Eradication of Corruption by KPK.” Universitas Gadjah Mada, 2020.
A. Pujiati, H. Yanto, B. Dwi Handayani, A. R. Ridzuan, H. Borhan, and M. S. Shaari, “The detrimental effects of dirty energy, foreign investment, and corruption on environmental quality: New evidence from Indonesia,” Front. Environ. Sci., vol. 10, p. 2636, 2023.
B. Abdul Karim Mr and Z. A. Karim, “Corruption and Foreign Direct Investment (FDI) in ASEAN-5: A panel evidence,” Econ. Financ. Indones., vol. 64, no. 2, p. 4, 2019.
P. Mauro, “Corruption and growth,” Q. J. Econ., vol. 110, no. 3, pp. 681–712, 1995.
V. Tanzi and H. Davoodi, “Corruption, public investment, and growth,” in The Welfare State, Public Investment, and Growth: Selected Papers from the 53 rd Congress of the International Institute of Public Finance, 1998, pp. 41–60.
S. Isra, F. Amsari, and H. Tegnan, “Obstruction of justice in the effort to eradicate corruption in Indonesia,” Int. J. Law, Crime Justice, vol. 51, pp. 72–83, 2017.
S. Suramin, “Indonesian Anti-Corruption Law Enforcement: Current Problems and Challenges,” J. Law Leg. Reform, vol. 2, no. 2, pp. 225–242, 2021.
J. G. Lambsdorff, “Corruption and rent-seeking,” Public Choice, vol. 113, no. 1–2, pp. 97–125, 2002.
S.-J. Wei and M. D. Kaufmann, “Does’ Grease Money’Speed Up the Wheels of Commerce?,” International Monetary Fund, 2000.
M. Najih and F. Wiryani, “Learning the social impact of corruption: a study of legal policy and corruption prevention in Indonesia and Malaysia,” J. Soc. Stud. Educ. Res., vol. 11, no. 4, pp. 175–189, 2020.
D. T. H. Hutabarat et al., “The Eradication Of Corruption And The Enforcement Of The Law In Indonesia As Seen Through The Lens Of Legal Philosophy,” Policy, Law, Notary Regul. Issues, vol. 1, no. 2, pp. 1–8, 2022.
Y. Bayar and N. Alakbarov, “Corruption and foreign direct investment inflows in emerging market economies,” Ecoforum J., vol. 5, no. 2, 2016.
J. T. Lindblad, “Foreign direct investment in Indonesia: Fifty years of discourse,” Bull. Indones. Econ. Stud., vol. 51, no. 2, pp. 217–237, 2015.
P. S. J. Kennedy, “The effect of corrupt behavior on the flow of foreign direct investment to Indonesia,” Asia Pasific Fraud J., vol. 3, no. 1, pp. 153–162, 2018.
A. Dirwan, “The effect of education against corruption in Indonesia,” OIDA Int. J. Sustain. Dev., vol. 12, no. 01, pp. 53–64, 2019.
A. Putriyana and N. Rochaeti, “The impact of enforcement of corruption law by the corruption eradication commission after the ratification of the latest KPK law,” J. Penelit. Huk. Jure, vol. 21, no. 3, p. 299, 2021.
B. D. Handayani, H. Yanto, A. Pujiati, A. R. Ridzuan, J. S. Keshminder, and M. S. Shaari, “The Implication of Energy Consumption, Corruption, and Foreign Investment for Sustainability of Income Distribution in Indonesia,” Sustainability, vol. 14, no. 23, p. 15915, 2022.
I. S. Z. Abidin, M. Haseeb, A. Muhammad, and R. Islam, “Foreign Direct Investment, Financial Development, InternationalTrade and Energy Consumption: Panel Data Evidence fromSelected ASEAN Countries,” Int. J. Energy Econ. Policy, vol. 5, no. 3, pp. 841–850, 2015.
B. Meivitawanli, “Research on the relationship between provincial foreign direct investment and economic growth: An empirical study in Indonesia,” J. Int. Stud., vol. 14, no. 1, pp. 241–257, 2021.
A. U. Syukri, B. Hasanuddin, A. H. Paddu, and S. Suhab, “Impact of Government Spending and Corruption on Foreign Direct Investment in Indonesia,” Res. Pap. Econ. Financ., vol. 6, no. 1, pp. 34–45, 2022.
Y. Bayar, “Effects of economic growth, export and foreign direct investment inflows on unemployment in Turkey,” Invest. Manag. Financ. Innov., vol. 11, no. 2, pp. 20–27, 2014.
R. Wulandari and M. K. Dermawan, “Construction of Anti-Money Laundering Policy in Indonesia from an International Law,” Balt. J. Law Polit., vol. 15, no. 4, pp. 1179–1199, 2022.
N. Dutta, S. Kar, and S. Saha, “Human capital and FDI: How does corruption affect the relationship?,” Econ. Anal. Policy, vol. 56, pp. 126–134, 201
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Indriya Fathni, Yana Priyana, Erry Fitrya Primadhany
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Facebook 
Instagram 
Twitter 
Youtube 
+62 821 1557 5700 
info@westscience-press.com 