RUPIAH EXCHANGE RATE FLUCTUATIONS, GDP, AND TRADE: THEIR IMPACT ON THE INVESTMENT CLIMATE IN INDONESIA

Abstract

This research was focuses on whether fluctuations in the rupiah exchange rate, GDP, and trade affect the investment climate in Indonesia. This type of research emphasizes research quantitative and also qualitative, which focuses on the relationship between research variables and examines the hypotheses that had been made. The analysis tool used Eviews to test endogenous and exogenous variables with the model of research. From the 2SLS test results, it was found that the GDP variable had a coefficient value of 0.185646 with an α value of 5 percent. it means that the GDP variable have a positive effect on investment, while the exchange rate (KR) variable have a coefficient value of -57.86067 but is not significant. Its indicates that the exchange rate has a negative and insignificant relationship. Finally, the trade variable (TR) have a coefficient value of 0.316032 but is not significant. This means that the trade variable has a positive and insignificant relationship. Meanwhile, the F test results showed that equation 1 is simultaneously influenced by external variables (INV). Similarly, the variables in equation 2 show that equation 2 is simultaneously influenced by exogenous variables. In other words, the rupiah exchange rate and trade has an influence on the investment climate in Indonesia but do not have a significant impact, unlike the GDP level, which is very influential and significant for the investment climate in Indonesia.