LIST OF CONTENT ABSTRACT............................................................................................................................................1 ABSTRAKSI...........................................................................................................................................3 APPROVAL PAGE................................................................................................................................5 LIST OF CONTENTS...........................................................................................................................7 LIST OF FIGURES...............................................................................................................................9 LIST OF APPENDICES.....................................................................................................................10 LIST OF TABLES................................................................................................................................11 CHAPTER 1 ​ INTRODUCTION................................................................................................................................12 1.1 Background................................................................................................................................12 1.2 Problem Statement.....................................................................................................................13 1.3 Research Objective....................................................................................................................14 1.4 Research Question.....................................................................................................................14 1.5 Research Limitation...................................................................................................................14 CHAPTER 2​ THEORETICAL FOUNDATION......................................................................................................16 2.1 Literature Review......................................................................................................................16 2.1.1 The Importance and Determinants of FDI.......................................................................16 2.1.2 The Role of Political Stability in FDI Inflows.................................................................17 2.1.3 Regime Type, Political Stability and FDI........................................................................17 2.2 Hypothesis Development...........................................................................................................19 2.2.1 Research Gap...................................................................................................................19 2.2.2 The Conceptual Model.....................................................................................................19 2.2.2.1 First Hypothesis......................................................................................................20 2.2.2.2 Second Hypothesis.................................................................................................20 CHAPTER 3 ​ METHODOLOGY...............................................................................................................................22 3.1 Research Design........................................................................................................................22 3.2 Variables....................................................................................................................................22 3.2.1 Dependent Variable..........................................................................................................22 3.2.2 Key Independent Variable................................................................................................22 3.2.3 Moderator Variable..........................................................................................................23 3.2.4 Control Variables..............................................................................................................23 3.4 Estimation Techniques...............................................................................................................24 CHAPTER 4 ​ RESULTS..............................................................................................................................................26 4.2 Correlations Matrix....................................................................................................................28 4.3 Regression.................................................................................................................................29 4.3.1 Hausman Test...................................................................................................................29 4.3.2 Regression Result.............................................................................................................30 4.4 Discussion..................................................................................................................................34 4.4.1 Hypothesis 1.....................................................................................................................34 7 4.4.2 Hypothesis 2.....................................................................................................................34 CHAPTER 5 ​ CONCLUSION.....................................................................................................................................36 5.1 Conclusion.................................................................................................................................36 5.2 Business Implication..................................................................................................................37 5.3 Recommendation for Future Research......................................................................................37 APPENDIX...........................................................................................................................................39 REFERENCES.....................................................................................................................................40 ​ 8 LIST OF FIGURES Figure 1.1 Conceptual Model………………………………………………………………18 9 LIST OF APPENDICES Appendix 1 FDI/GDP Dependent Variable…………………………………………………..37 10 LIST OF TABLES Table 1. Descriptive statistics of variables …………………………………………………..25 Table 2. The Correlation Matrix……………………………………………………………...27 Table 3. VIF Result…………………………………………………………………………..28 Table 4. Regression Result…………………………………………………………………...30 Table 5. Regression Result with lnINF and lnTO…………………………………………...32 Table 6 . Regression Result (FDIGDP)………………………………………………………37 11.