Determinants and The Impact Foreign Investment to Economic Growth and Unemployment in Java-Bali Region

This study aims to find the determinants of foreign direct investment coming into the Java-Bali and analyze the impact of foreign investment on economic growth and unemployment in the Java-Bali. The research methodology used in this research is quantitative method using secondary data 2004-2012 period, using key informants and some informants who cooperate with foreign investors for a deeper investigation of some of the results of this study. This study uses Path analysis through partial least square (PLS). The study found wages and no significant negative impact on FDI, Economic Stability does not significantly affect the FDI, Human Capital and significant positive effect on FDI, Human Capital and significant positive effect on wages, FDI positive and significant impact on economic growth, FDI effect positive and significant impact on unemployment. Results of this study have implications for practical namely: 1) Changes in wages that always happens every year in Java and Bali does not affect foreign investment, 2) Changes in economic stability did not result in changes in foreign investment, 3) Changes in human capital resulted in a change in planting foreign capital, 4) Changes in human capital resulted in a change in wages, 5) Changes in foreign investment will lead to changes in economic growth, 6) Changes in foreign investment resulted in changes in unemployment. This affects the results of theoretical research on: 1) Strengthening existing theories such as: The Theory of Differential Rates of Return Hypothesis, Theory vicious circle of Nurkse, Harrod Domar growth theory, growth theory Solow, Romer growth theory, theory of acceleration; 2). Not in line with the theory as: Country Risk Hypothesis Theory, Theory of The Location Hypothesis, theory of capital accumulation Jhingan, balanced growth Doctrine. Keywords: Determinants of FDI, Economic Growth, Unemployment.