Agricultural Sector FDI as a Driver of Tourism Sector FDI for a Sustainable Economy

Abstract

This study aims to see whether FDI (Foreign Direct Investment) from the Agricultural Sector can be able to encourage FDI from the Tourism sector in Sumatra Island in the short and long term are supporting the Sustainable Economy in the future. The first analytical method used in this research is the descriptive method and the second method is the panel data regression method with the Vector Error Correction Model (VECM) in 8 regions on the island of Sumatera-Indonesia for 20 years. FDI from the Agricultural Sector is expected to be able to encourage the growth or increase of FDI in the Tourism sector; because several developed countries have changed or developed other service sectors to lead a Sustainable Economy. And the results of this study prove that in the long term and short term FDI in the agricultural sector and FDI in the Tourism services sector influence Gross Domestic Product Regional (GDPR).