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The Economics and Finance Letters

June 2021, Volume 8, 1, pp 1-13

Determinant of Indonesian Plantation Industry Investment ERA 4.0

M. Noor Salim

,

Darwati Susilastuti

,

Wahyu Murti

M. Noor Salim 1
Darwati Susilastuti 2

Wahyu Murti 3

  1. Lecturer of Post Graduate of Mercubuana University, Indonesia. 1

  2. Lecturer of Agriculture Faculty of Universitas Borobudur, Indonesia. 2

  3. Lecturer of Economic Faculty of Universitas Borobudur, Indonesia. 3

Pages: 1-13

DOI: 10.18488/journal.29.2021.81.1.13

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Article History:

Received: 17 August, 2020
Revised: 23 October, 2020
Accepted: 06 November, 2020
Published: 27 November, 2020

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Abstract:

The plantation management, its performance are determined by its productivity which is influenced by both internal and external factors. The objectives of this study are to determine the effect of inflation, interest rates, exchange rates, and infrastructure on plantation investment in Indonesia, to determine which factors are dominant in plantation investment, and to determine the effect of plantation investment on the gross domestic product of plantations in Indonesia. The method of determining the research area was carried out purposively, namely plantations in Indonesia. This study uses secondary data from annual data from 1990 to 2019 with OLS multiple linear regression data analysis methods. The results of this research are that simultaneously, the variables of inflation, interest rates, exchange rates, and infrastructure have a significant effect on plantation investment in Indonesia. Partially, the inflation and interest rate variables have a negative non-significant effect on investment, while the exchange rate and infrastructure variables have a positive significant effect on plantation investment. Infrastructure is a dominant factor. Investment has a positive significant effect on plantation GDP. The findings of his research are that plantation investment is resistant to shocks from fluctuations in inflation and interest rates. The increase in the rupiah exchange rate against the US dollar provides benefits for foreign investment. Infrastructure as a dominant factor is an attraction and a driver for investment. Investment has a strong and large contribution to the formation of GDP for plantations and their productivity.
Contribution/ Originality
The paper's primary contribution is finding that the driver and attractor of plantation investment is infrastructure. The originality of this study is to examine the effect of macroeconomic factors i.e. inflation, interest rates, exchange rates, and infrastructure on long-term investment in the plantation industries.

Keywords:

Exchange rate, Inflation, Infrastructure, Interest rate, Plantation GDP, Plantation investment.

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Funding:

This research was funded from a collaborative project between Mercubuana University and Borobudur University.

Competing Interests:

The authors declare that they have no competing interests.

Acknowledgement:

Thanks, are conveyed to the Rector of Mercubuana University and Borobudur University in Jakarta for the opportunity and support so that this research can be carried out properly.

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