Track: Modeling and Simulation

Abstract

Indonesia has a unique characteristic, namely a large area separated by islands and diverse people in culture and religion as well as abundant economic resources. Indonesian President Joko Widodo faces various domestic political opponents and foreign interests over Indonesian resources. Since the export of mining raw materials is prohibited, foreign investors must invest directly in Indonesia. Therefore, efforts to attract foreign investment to manage natural resources are very important. This paper wants to explain the problem of econometrics, namely stationarity in Indonesia's foreign direct investment panel data. The Panel Unit Root test can be carried out in various ways, namely the Levin-Lin-Chu Test, Harris-Tzavailis Test, Breitung, Im-Pesaran-Shim Test, Fisher Type Test, and Hadri LM Stationary. The Software of data processing is Stata Release 15. We use panel data covering all 34 provinces and 12 periods from 2009-2020. The result of this research is that Foreign direct Investment data is stationary and can be used to solve econometric problems. Thus, Indonesia's panel data for foreign direct investment is robust.