ANALYSIS OF DOMINANT FACTORS THAT INFLUENCE CHINESE COMPANIES INVEST IN MINING INDUSTRY IN INDONESIA

Abstract

This study was about the dominant factors that influence Chinese companies to invest in mining industry in Indonesia. Nowadays, there were many Chinese companies do mining business industry in Indonesia, because of the huge deposit reserves of all kinds of ores and the increasing price of ores. The writer would like to find out what factors that influence Chinese companies attract the foreign direct investment and what is the dominant factor. It shows why FDI occurs in mining industry in Indonesia. The writer made this study in Cikarang, Indonesia. In order to finish this study, the President University thesis advisors gave help to the writer, and many managers of Chinese mining companies also helped the writer to get useful information.

This research used quantitative research methodology, the writer took thirty-seven (37) managers of Chinese mining companies invest in Indonesia as respondents to collect information. For this study, the writer would like to make use of questionnaire to collect the data from these managers. And then, the writer takes advantage of weighted mean to analysis the data.

Based on the previous research and this research, the writer knew that ownership advantage become as the dominant factor, especially for two elements, advanced technology and competitive price, that influence the Chinese companies make the decision to do the foreign direct investment in Indonesia’s mining industries. And the writer recommended Chinese companies to do as following: continuously enhance the ownership advantage of Chinese Company; make the detailed analysis for location advantage; enhance the internalization advantage for company