The Impact of Foreign and Domestic Investment on Economic Growth in West Sumatera

ADE, PUTRA PRATAMA (2016) The Impact of Foreign and Domestic Investment on Economic Growth in West Sumatera. Masters thesis, Universitas Andalas.

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Abstract

One of the source of sustainable economic growth is capital investment. Investment activity is a major factor as a driver of growth and development of other sectors such as trade, import-export, banking, transportation and insurance, with the investment in a region can absorb the workforce, thereby reducing unemployment, increasing revenue, and eventually causing an increase in power public purchasing. Besides, the education factor will also be encouraged and have an impact on improving human resources (HR). Other positive impacts of the investment will encourage other activities related to the project, so that the local revenues from taxes and levies will rise or in other words "investing activities" will provide multiplier effects. Investments can be done by the government, private, domestic and foreign private. In general, the impact of investment made by the government is not very significant in spurring high economic growth. Government capital investment is usually always faces budget constraints and less frequent faces higher inflationary impact on the economy (crowding out effect). Based on this, any efforts to create high economic growth and sustainable private sector would prompt the national and foreign private sector to invest in Indonesia, particularly in West Sumatra.

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