This study examines the impact of foreign direct investment (FDI) on economic growth in Indonesia's 33 provinces from 2010 to 2019, using sectoral data at the provincial level. The findings show that FDI has a positive and statistically significant effect on economic growth in Indonesia. Specifically, FDI in the mining, manufacturing, water, gas and electricity, hotels and restaurants, and real estate sectors has a significant positive impact 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 also finds that FDI in the manufacturing sector has a particularly strong positive effect on economic growth. The results suggest that FDI in the manufacturing sector is a key driver of economic growth in Indonesia. The study highlights the importance of understanding the sectoral impact of FDI on economic growth, as well as the need for policymakers to focus on promoting FDI in sectors that contribute positively to economic growth. The study also emphasizes the importance of improving the absorption capacity of domestic firms to better utilize the benefits of FDI. The findings contribute to the literature on the impact of FDI on economic growth, showing that the effect of FDI varies across sectors and that the manufacturing sector is particularly important for economic growth in Indonesia. The study also highlights the need for further research on the mechanisms through which FDI affects economic growth, as well as the role of institutional factors in determining the impact of FDI on economic growth.This study examines the impact of foreign direct investment (FDI) on economic growth in Indonesia's 33 provinces from 2010 to 2019, using sectoral data at the provincial level. The findings show that FDI has a positive and statistically significant effect on economic growth in Indonesia. Specifically, FDI in the mining, manufacturing, water, gas and electricity, hotels and restaurants, and real estate sectors has a significant positive impact 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 also finds that FDI in the manufacturing sector has a particularly strong positive effect on economic growth. The results suggest that FDI in the manufacturing sector is a key driver of economic growth in Indonesia. The study highlights the importance of understanding the sectoral impact of FDI on economic growth, as well as the need for policymakers to focus on promoting FDI in sectors that contribute positively to economic growth. The study also emphasizes the importance of improving the absorption capacity of domestic firms to better utilize the benefits of FDI. The findings contribute to the literature on the impact of FDI on economic growth, showing that the effect of FDI varies across sectors and that the manufacturing sector is particularly important for economic growth in Indonesia. The study also highlights the need for further research on the mechanisms through which FDI affects economic growth, as well as the role of institutional factors in determining the impact of FDI on economic growth.