Abstrak
Japan is the largest source of foreign direct investment (FDI) and market for Indonesian export. The purpose of this study is to measure the relationship of Japanese direct investment on Indonesia export to Japan. The result show that Japanese FDI have significant relation with Indonesian export to Japan. The reasons are that Japanese FDI are export oriented, resource based (vertical integration motive), non-trade barrier circumventing, complement relationship, and backward linkage effect. The implication of this study is that Japanese FDI is a strategic push factor of Indonesian export to Japan. Indonesian investment policy should attract Japanese FDI by creating climate and incentive for Japanese FDI in Indonesia.
