THE ROLE OF FOREIGN INVESTMENT & IDX COMPOSITE IMPROVING THE ECONOMY IN INDONESIA

Abstract

Our research is to test and analyze the effect of foreign investment and IDX composite on gross domestic product by including variables, inflation, Bank Indonesia interest rates, domestic investment, exports, and imports. Quarterly data is used for each variable from the Indonesian Stock Exchange and Indonesian Economic Report for the period 2008 to 2022. Multiple linear regression tests using SPPS software were carried out to test the effect of the independent variables on the dependent variable. The main finding of our research is that foreign investment is the variable that most affects gross domestic product with a positive and significant direction of influence. Another finding is that IDX composite has a positive and significant  effect  on  gross  domestic product.  Inflation,  Bank  Indonesia  interest  rate, export, and import have a positive and insignificant effect on gross domestic product, while the only variable that has a negative effect on gross domestic product is domestic investment, but it is not significant.