This study examines the impact of Foreign Direct Investment (FDI) on economic growth in Indonesia, focusing on sectoral data at the provincial level from 2010 to 2019. The research aims to address the inconclusive findings in previous literature regarding the positive contributions of FDI to economic growth. Using a fixed effects estimator, the study finds that FDI significantly positively impacts economic growth in Indonesian provinces. Specifically, FDI in the mining, manufacturing, water, gas and electricity, hotels and restaurants, and real estate sectors has a significant positive effect on economic growth. In contrast, FDI in the agricultural sector has a significant negative impact. The results are robust to the GMM System estimator, which accounts for endogeneity issues. The study concludes by suggesting that policymakers should focus on promoting FDI in the manufacturing sector to enhance economic growth, while also addressing the absorption capacity of domestic firms to benefit from FDI.This study examines the impact of Foreign Direct Investment (FDI) on economic growth in Indonesia, focusing on sectoral data at the provincial level from 2010 to 2019. The research aims to address the inconclusive findings in previous literature regarding the positive contributions of FDI to economic growth. Using a fixed effects estimator, the study finds that FDI significantly positively impacts economic growth in Indonesian provinces. Specifically, FDI in the mining, manufacturing, water, gas and electricity, hotels and restaurants, and real estate sectors has a significant positive effect on economic growth. In contrast, FDI in the agricultural sector has a significant negative impact. The results are robust to the GMM System estimator, which accounts for endogeneity issues. The study concludes by suggesting that policymakers should focus on promoting FDI in the manufacturing sector to enhance economic growth, while also addressing the absorption capacity of domestic firms to benefit from FDI.