The Effect of Renewable Energy Consumption on Economic Stability: Panel Data Analysis on Selected Countries

This study aims to investigate the effect of renewable energy consumption on economic stability. In this regard, covering the period of 1990-2016, data of 35 countries, 19 of which are developed and 16 of which are developing, were used. The cointegration analysis results reveal that, there is a long-term relationship between the two variables in developed and developing countries. According to panel coefficient estimators, the effect of renewable energy consumption on economic stability is positive and statistically meaningful in Germany, Denmark, Italy, Switzerland, and Sweden, which are developed countries, and also in Egypt, Turkey, Taiwan, Pakistan, and Indonesia, which are developing countries. However, the effect is negative and significant in contrast to expectations in England and Belgium, which are developed countries, and in India and the Philippines, which are developing countries.

can disrupt the balance in the economy, leading to instability. From this point of view, it is stated that the use of clean and sustainable alternative energy resources produced domestically is in an important position in ensuring economic stability by reducing possible imbalances in economic indicators.
The aim of this study is to examine the effect of renewable energy consumption on economic stability. The importance of the study is an effort to make a contribution to this field, as studies on sustainable growth and economic stability are less common in the energy literature. 1 The feature that distinguishes the study from its peers is the use of a more comprehensive index that includes basic macroeconomic indicators representing economic stability. The rest of the study is organized as follows: Following the introduction part where the concepts of energy and economic stability are introduced, the relationship between renewable and non-renewable energy sources and economic stability is discussed in the theoretical discussion section. In the section where the current literature is examined, the previous studies are summarized and grouped in the context of economic stability indicators. Following the explanations about the data set and model, method and empirical findings were shared in the panel data analysis section. In the conclusion part, the policy recommendations are evaluated by evaluating the findings.

II. Theoretical Discussion
Among the main studies examining the relationship between energy and economic activities are Hudson and Jorgenson (1974), Allen et al. (1976), J. Kraft and A. Kraft (1978), Hitch (1978), Akarca and Long (1980), Eden and Hwang (1984). In these studies, the relations among fossil, nuclear energy sources and economic activities were discussed. On the other hand, after the oil crises in the 1970s, the energy economy has preserved its place in the economy until today, and has made progress in two major literature axes since then. While the first main literature is formed within the framework of the relationship between energy and growth, the second is shaped by the effect of energy prices on economic performance. The pioneer of the first literature, J. Kraft and A. Kraft (1978), is considered to be the pioneer of the second literature, Hamilton (1983).
Energy is regarded as an important factor for economic stability and sustainable growth. The reason is that, the effect of shocks experienced in energy prices on economic fluctuations is a generally accepted issue. On the other hand, when the economy is exposed to economic shocks caused by energy price increases and supply cuts, deteriorations may occur in the environment of economic stability and sustainable growth (Aguiar-Conraria and Wen, 2006;Nkomo, 2005). In general, it is argued that energy-induced shocks and fluctuations distort both the internal and external stability of economies, and significantly affect the countries that export and import energy without making a distinction between developed and developing economies (Chaudhry et al., 2015). However, it is stated that the move towards renewable energy can prevent the economic instability caused by the shocks and volatility mentioned above. The reason is that, with the dissemination of renewable energy, integration of national markets with alternative energy markets may decrease the possibility of economic instability caused by fossil energy by increasing energy diversity ( Van de Ven and Fouquet, 2017).
The widespread use of renewable energy sources encourages economic growth thanks to efficiency gains, creates new employment sources and reveals a more competitive structure especially in the production and manufacturing sectors (WEF, 2019). On the other hand, towards the Sustainable Development Goals, 2 it reduces environmental concerns, serves energy security, provides foreign currency savings to countries, current account deficit and socioeconomic, etc. contributes positively to factors (Hanff et al., 2011). When evaluated as a whole, it can be said that renewable energy is associated with a sustainable and stable economic structure and has a key role in establishing economic stability.
In general, while the current literature examines the relationship among renewable energy and the economic variables, the difference of this study is that the energy is analyzed from a wider perspective, ie, the economic stability index covering macroeconomic variables. It is thought that this research will contribute to the literature and offer a different perspective.

III. Data Set and Econometric Model
Economic stability index (ECO), renewable energy consumption (REC), non-renewable energy consumption (NREC) and political stability index (POL) variables were used in the study. These variables are included in the analysis by taking their logarithms and expressed as LECO, LREC, LNREC and LPOL. The study period covers the period of 1990-2016. Economic stability index data were calculated by the authors following the "International Country Risk Methodology (ICRG)" of the PRS group. 3 Renewable energy 2 Sustainable development is a broad concept that evaluates economic, social and environmental factors together, including long-term equilibrium in the economy, efficient use of the factors of production and transfer of resources to future generations (Pearce, 1988). 3 The International Country Risk Guide (ICRG) consists of 22 sub-components in three main stability / risk categories: Political, economic and financial. The economic stability / risk index consists of five subcomponents: GDP per capita, growth rate, inflation rate, the share of the budget balance in GDP and the share of the current balance in GDP. The general purpose of this index is to determine whether a country is economically at risk / stable by addressing its strengths and weaknesses. These strengths and weaknesses were consumption data were obtained from the "Economic Development and Cooperation Organization (OECD)" database, and non-renewable energy consumption data from the official website of "British Petroleum (BP)". Political stability index data were accessed from the official website of the ICRG. 4 General explanations of the variables are presented in Table 1.

Table 1: General Explanations of Variables
The countries included in the study were selected among 40 countries listed according to the "Renewable Energy Country Attractiveness Index (RECAI)". Due to the data constraint, analyzes were carried out on 35 countries in total. These countries are classified as developed countries and developing countries. In the classification of countries, the WESP (2019) report of the United Nations was used. The countries included in the analysis are given in Table 2.

Table 2: Countries Included in the Analysis
determined by assigning risk / stability points, called economic risk / stability components, to each factor. The lower the total score (0-50), the more avoid the economic stability is the existence of an economy. On the other hand, the higher the total score, the greater the economic stability of the country concerned is expressed (PRS-ICRG, 2018: 2-14). 4 The purpose of the political stability / risk index is to evaluate the political stability of the countries covered by the ICRG comparatively. This index consists of 12 subcomponents: Government stability, socioeconomic conditions, investment profile, internal conflict, external conflict, corruption, military in politics, religious tension, law and order, ethnic tension, democratic accountability and bureaucracy quality. The index gets scores ranging between 0-100. As total value gets close to 100 points, political stability increases, and as it converges to 0, political risk increases (PRS-ICRG, 2018: 2-7).

Tunahan Hacıimamoğlu, Ali Rıza Sandalcılar
Emerging Markets Journal | P a g e |13 In the study, Kaldor (1976), Kissel and Krauter (2006) One of the variables in the model is LECOit; Economic stability index of country i at time t, LRECit; The renewable energy consumption of country i at time t, LNRECit; The non-renewable energy consumption of country i at time, LPOLit; It represents political stability index of country i at time t. uit is the error term of country i at time t. The indices i and t indicate the cross section size (N =19 for developed countries, N =16 for developing countries) and time dimension (T =27), respectively.
Since LREC and LNREC variables are important input positions for economic activities, their impact on the economic stability index variable is expected to be positive. The LPOL variable is one of the important determinants for economic stability, and its expected impact on economic stability is also positive. Eviews 10, Stata 16 and Gauss 19 package programs were used for panel data analysis in the study.
In the study, the order of econometric method is formed as follows:  BP (1980) LM and Pesaran (2004)

Cross-Sectional Dependence Test and Results
It is expected that, it will affect other countries due to the shock experienced in any country because of developments such as globalization, technological progress and free foreign trade. Such a situation may cause inter-unit correlation, that is, cross-sectional dependence (Menyah et al., 2014: 389). In the study, Breusch andPagan (1980) LM andPesaran (2004) CDLM tests are used to determine the cross-sectional dependence. Breusch and Pagan (1980) LM test statistics are calculated as follows: Based on the OLS estimate in the pij equation, it is an example estimate of the bidirectional correlation of the error term for each i. The LM test is valid for panels where N is relatively small and T is large enough. For large panels with T → ∞ and N → ∞ , Pesaran (2004) suggests the scale version of the LM test as follows: CDLM test shows normal distribution with N (N-1) / 2 degree of freedom and asymptotic chi-square properties. It can be applied when N and T are large. However, if N is large and T is small, it is likely to show significant distortions.
Considering the time dimension and section size of the study (T> N), it is stated that LM and CDLM cross-sectional dependence tests are suitable tests. In Table 3, the results of the cross-sectional dependence of the model are reflected.

Table 3: Cross-Sectional Dependence Results
Notes: * represents 1% significance level. Values in square brackets reflect probability values. Lags is determined as 3. H0: No cross-sectional dependence; HA: There is a cross-sectional dependence.
According to Table 3, null hypothes for developed countries and developing countries is rejected at the level of 1% significance in the LM and CDLM tests. Thus, there exists a cross-sectional dependence for both country panels.

Slope Coefficient Homogeneity Test and Results
Testing the homogeneity of slope coefficients goes back to Swamy (1970). Standardized distribution statistics of Pesaran and Yamagata (2008) Δ ̃ and Δ ãdj tests are formulated as follows: With the condition (N, T) → ∞, √ / → ∞ and as long as the error terms have a normal distribution, the test of Δ ̃ is asymptotic standard normally distributed. Δ ̃ test is a test statistic with small sampling characteristics. The Δ ãdj test statistics, adapted to the large sample properties, is organized in the form below:

MODEL (CD TEST)
Developed Countries

Developing Countries
BP (2004) Table 4 shows the homogeneity test results of developed countries and developing countries.
In Table 4, according to the model results of Δ ̃ and Δ ãdj tests, null hypothesis for developed countries and developing countries is rejected at 1% significance level and it is determined that both groups of countries have a heterogeneous structure. In other words, it is observed that the slope coefficients specific to the sections forming the model have changed between the units.

Panel Unit Root Test and Results
Pesaran (2007) developed the CADF (Cross-Sectionally Augmented Dickey-Fuller) test by including the lagged cross-section averages in the ADF regression. It is used in case of T> N and N> T. In addition, this test gives reliable results even if T and N are small.
The dynamic heterogeneous panel data model discussed in the test process is as follows: The error term with a single factor structure is shown as follows: When equations 6 and 7 are evaluated together, equation 8 is composed as follows: CADF regression is shown in the form below: CIPS (Cross-Sectionally IPS) panel unit root statistics are obtained by averaging the unit root statistics of each cross-section in CADF regression.
CADF testing is a test method that takes into account cross-sectional dependence and heterogeneous structure of cross-sections. CIPS statistics are reached by averaging the CADF statistics. In Table 5, CIPS test statistics, which represent the overall panel, are shared in constant & no trend and constant & trend model forms.

Panel Cointegration Test and Results
While the Durbin-Hausman panel cointegration test takes into account the cross-sectional dependence, it does not take into account the prior knowledge of the cointegration degrees of the variables. Instead, common factors are taken into account. In this test, although the dependent variable is I (1), it does not matter whether the independent variables are I (0) or I (1), but DH-p and DH-g test statistics can be used according to the homogeneous and heterogeneous structure of the panel coefficients (Westerlund, 2008: 205).
First, the group average statistic is shown as follows: Hypotheses of group average statistics; : ø = for all i's, : ø < it is expressed in this way for some i.

Developed Countries
Delta ( The hypotheses of panel statistics are indicated below; : ø = for all i's, : ø = ø ø < created this way for all i's. The alternative hypothesis of the group average statistics differs from the alternative hypothesis of panel statistics, with the expression "for some i". The reason for this is that, in panel statistics, individual terms (n) are collected before being put together. In group statistics, firstly, various terms are multiplied and then summed up (Westerlund, 2008: 203).
Westerlund and Edgerton (2007) xit represents the independent variables that are assumed to be K-dimensional random walk property.
eit assumes that the mean zero errors along t and αij provide the usual summability conditions of its parameters.
One of the important features of this test is that, the alternative hypothesis asserts there is no cointegration in response to the null hypothesis that assumes cointegration. Hypotheses are presented as follows:

=
= for all i's, = > it is expressed in format for some i's.
In the case of cross-sectional independence stated in the study of McCoskey and Kao (1998), the test statistics equation is formed as follows: Due to the unit root characteristics of the variables of developed countries, 5 the long-term 5 In the developed countries, While the LPOL variable is stationary at the level, other independent variables, the LREC and the LNREC differed according to the model forms. Therefore, the final decision regarding the unit root / stationary process of the LREC and the LNREC variables could not be reached. relationships between them are analyzed with the Durbin-Hausman panel cointegration test. Table 6 shows the results of the Durbin-Hausman panel cointegration test analysis. Considering the heterogeneous structure of the model, DH-g (group) test statistics should be taken as basis for Durbin-Hausman panel cointegration test analysis results. The null hypothesis is rejected, because the probability value for the group statistics is less than 1%. Alternative hypothesis is accepted for some units, stating that there is a cointegration relationship. As a result, it has been proved that the variables act together in the long term, that is, cointegrated in developed countries.
Long-term relationships between variables in developing countries are investigated using Westerlund and Edgerton panel cointegration testing without structural break. In Table 7, structural unbreakable cointegration test analysis results are given.

Table 7: Westerlund and Edgerton LM Panel Cointegration Test Analysis Results
Notes: Bootstrap probability values are obtained from 1000 replicate distribution and asymptotic probability values are obtained from standard normal distribution. H0: There is a cointegration relationship; HA: There is no cointegration relationship.
In Westerlund and Edgerton (2007) panel cointegration test, asymptotic p value is used for the model without cross-sectional dependence and bootstrap p value for the model with cross-sectional dependence. Therefore, since the presence of cross-sectional dependence is detected in developing countries, the bootstrap p value is taken as the basis.
According to the results of LM test analysis in Table 7, the null hypothesis could not be rejected in both the constant and no trend and the constant and trend model form according to the bootstrap p value. In other words, the null hypothesis was accepted in the developing countries, which means that variables act together in the long term, that is, they are cointegrated.

Long Term Panel Cointegration Coefficient Estimator Test and Results
The long-term "Augmented Average Group" (AMG) estimator, which allows cross-sectional dependence with the addition of the common dynamic effect to the regression, also takes into account the heterogeneity of slope coefficients. On the other hand, the AMG estimator method can be used in the case of internality, which assumes the relationship between independent variables and error terms. This test statistics is subject to a two-step testing process. In the first step, the operation of the OLS (FD-OLS) regression model, whose first difference is taken, is discussed and this process is explained as follows (Eberhardt & Bond, 2009;Eberhardt & Teal, 2010): The first step is carried out on the pooled regression model with the primary difference process. It is suggested that non-stationary and hidden variables deviate from pooled regression estimation results in this step. Therefore, a standard difference estimator (FD-OLS) regression is introduced with the T -1 year dummy, where the dummy coefficients re-labeled as ̂⦁ are summed. In the second step, the AMG estimator test statistics is shown as follows: In the second step, this variable (β) is included in each of the N standard country regressions, including linear trend terms, to capture neglected peculiar processes that develop linearly over time. Table 8 and Table 9 report the AMG cointegration coefficient estimator results for developed and developing countries, respectively. Thanks to the results of the AMG coefficient estimator analysis, it is possible to discuss country-specific discussions on which variables affect the LECO dependent variable for both groups. Table 8 shows the AMG cointegration coefficient estimator results for developed countries.
According to the AMG coefficient estimator results shared in Table 8, the effect of the LREC variable on the LECO variable has been found to be significant and positive, as expected in Germany, Denmark, Italy, Switzerland and Sweden. It has been observed that a 1% increase in renewable energy consumption caused an increase in the economic stability index by 0.113% for Germany, 0.030% for Denmark, 0.046% for Italy, 0.214% for Switzerland and 0.306% for Sweden. On the other hand, contrary to what is expected in England and Belgium, the effect of renewable energy consumption on the economic stability index is negative and statistically significant. A 1% increase in renewable energy consumption in England and Belgium reduces the level of economic stability index in these countries by 0.022% and 0.029% respectively. It is thought that some factors come into prominence as the cause of the negative relationship. In general, these factors include that the facility, parts and maintenance services required for renewable energy production contain high costs and incentives create additional burden on the budget. There is not enough qualified workforce in this field. Traditional energy lobby activities are active. Also, financing renewable energy incentives are reflected on household electricity bills. Such factors can lead to imbalances in economic activities, causing economic instability.
Belgium, Norway and Finland are the countries with statistically significant and positive relationships between the LNREC variable and the LECO variable. The 1% increase in non-renewable energy consumption in these countries increases the economic stability index by 0.334% in Belgium, 0.200% in Norway and 0.420% in Finland. In USA, Japan, Spain, Ireland, Portugal and Greece, the relationship between the variables is negative. It has been determined that, an increase of 1% in non-renewable energy consumption in these countries cause a decrease in the economic stability index by 0.299% in USA, 0.803% in Japan, 0.131% in Spain, 0.317% in Ireland, 0.257% in Portugal and 0.298 in Greece. Considering the results that arise contrary to the Tunahan Hacıimamoğlu, Ali Rıza Sandalcılar Emerging Markets Journal | P a g e |17 expectations, external costs such as energy shocks, chronic current account deficit, environment and health are suggested as the reasons of the negative relationship. Considered as a whole, it can be said that dependence on foreign energy causes imbalances in economic indicators through current account deficit and often causes external costs that are not taken into account.
It has been determined that the LPOL variable is positive and statistically significant as expected on the LECO variable in France, Australia, England, Spain, Italy, Greece, Sweden and Finland. Table 9 shows the AMG cointegration coefficient estimator results for developing countries.
According to the test results in Table 9 presented by the AMG coefficient estimator, the impact on the LREC variable of the LECO variable is positive and significant in Egypt, Turkey, Taiwan, Pakistan and Indonesia. However, it is negative and statistically significant in India and Philippines. Accordingly, a 1% increase in renewable energy consumption, economic stability index increases by 0.349% in Egypt, 0.405% in Turkey, 0.092% in Taiwan, %1.863 in Pakistan and %1.730 in Indonesia. However, in India and Philippines, economic stability index reduces by 0.517% and 0.490% respectively.
Amongst developing countries, in China, India, Argentina, Chile, Brazil, Mexico, Turkey, South Korea and the Philippines, it has been observed that there is a positive and statistically significant relationship between the LNREC and the LECO variables. In these countries, when a 1% increase in consumption of non-renewable energy is observed, the index of economic stability increases by 0.077% in China, 0.302% in India, 0.863% in Argentina, 0.179% in Chile, 1.067% in Brazil, 0.957% in Mexico, 0.769% in Turkey, 0.221% in South Korea and 0.479% in Philippines. However, in Egypt and Pakistan, a negative and significant relationship has been found between the variables. It has been determined that, 1% increase in non-renewable energy consumption in Egypt and Pakistan cause a decrease by 0.319% and 0.616% in the economic stability index, respectively.
While the relationship between the LPOL and the LECO variables is positive in India, Argentina, Chile, Egypt, Peru and Indonesia, this relationship is negative only in China, contrary to expectations. This relationship emerging in China is thought to stem from China's distinctive socioeconomic structure.

Panel Causality Test and Results
Emirmahmutoğlu and Köse (2011) panel causality test is a Granger causality test based on the Toda-Yamamoto (1995) test. Considering the heterogeneous structure of the panel and the dependence between the sections, this test can be applied on stationary series of different degrees. It can also be used in the absence of a cointegration relationship.
The process of this test is summarized as follows (Emirmahmutoğlu and Köse, 2011: 871-873): First, the heterogeneous panel VAR (k_i) model with p variables is expressed as follows: The symbol i indicates the section size, and the symbol t indicates the time dimension. The term is a p-dimensional vector of fixed effects.
,…, is the constant (p × p) matrix of parameters allowed to change between units. , is defined as a column vector of the error terms p.
In the VAR model, the variables containing unit roots cause non-standard asymptotic distributions containing coefficient problems in Wald statistics. In this case, the Granger causality test ceases to be valid for non-stationary variables. To eliminate this problem, Toda and Yamamoto (1995) developed the LA-VAR model as an alternative approach to test the coefficient constraint of the VAR model. In heterogeneous mixed panels, the ( + ) model is estimated as follows: i=1,2,…,N; t=1,2,…,T To test the hypothesis that there is no Granger causality in heterogeneous panels, Fisher (1932) test statistics are used. Fisher test statistics are shown as follows: The term pi represents the p value corresponding to the Wald statistics of the section. This test statistic has a chi-square distribution at 2N degrees of freedom. It is stated that the test is valid only when N converges T → ∞.
In heterogeneous mixed panels, the ( + ) lagged VAR model is formulated as follows:   show the highest level of integration suspected for each i in the system. While causality from x to y is tested in equation 22, causality from y to x in equation 21 is tested using a similar procedure. Table 10 shows the results of Emirmahmutoğlu and Köse panel causality test analysis for developed countries. In Table 10, according to the panel Fisher test statistic, which represents the overall panel, "LREC is not the Granger cause of LEKO", null hypothesis is rejected, while "LECO is not the Granger cause of LREC", null hypothesis could not be rejected. In other words, an alternative hypothesis is accepted for the panel of developed countries, which suggests that the economic stability index is the Granger cause of renewable energy consumption. On the other hand, the null hypothes could not be rejected stating that the renewable energy consumption is not the Granger cause of the economic stability index. As a result, based on the one-way relationship from renewable energy consumption to economic stability index, it has been revealed that there is a "growth hypothesis" for the panel in developed countries.
Considering country-based causality relations, the direction of causality in Australia, Germany and Norway is from renewable energy consumption to economic stability index, while the direction of causality in Spain is from economic stability index to renewable energy consumption. In France, however, it is determined that there is a two-way relationship. As a result, within the framework of the period and countries analyzed, it has been proved that the "growth hypothesis" for Australia, Germany and Norway, "conservation hypothesis" for Spain and "feedback hypothesis" for France are valid. Table 11 shows the results of Emirmahmutoğlu and Köse panel causality test analysis for developing countries. In Table 11, according to the panel Fisher test statistic, which represents the overall panel, "LREC is not the Granger cause LECO" and "LECO is not the Granger cause of the LREC". Null hypotheses is not rejected. In other words, no statistically significant relationship has been found for the panel of developing countries, both from renewable energy consumption to economic stability index and from economic stability index to renewable energy consumption.
When the causality results of the countries are evaluated, statistically significant relationships have been observed in India, Mexico, Philippines and Peru from renewable energy consumption to the economic stability index. On the other hand, it has been determined that there is a significant causal relationship only in Egypt and Taiwan from the economic stability index to renewable energy consumption. As a result, the "growth hypothesis" in India, Mexico, the Philippines and Peru and the "conservation hypothesis" in Egypt and Taiwan have been proved to be valid among developing countries in the context of the period and country panel.

IV. Conclusion and Recommendations
Considering that energy is an important input for economic activities, alternative energy sources are significant in meeting energy demand. In this way, it is stated that a more balanced process will be followed in economic activities by providing energy resource diversity. In this context, renewable energy consumption is expected to reduce imbalances in economic indicators and contribute to economic stability as a whole. In the study, the effect of renewable energy consumption on economic stability has been examined in the context of developed countries and developing countries, and crosssectional dependence and heterogeneity have been determined for both country groups. After the unit root test, the cointegration test results reveal that variables in both country groups act together in the long term. According to the long-term coefficient estimator, results contrary to expected ones have been reached in some countries and the reasons for this have been discussed. Finally, causality relationships have been interpreted in terms of hypotheses.
According to the long-term coefficient estimator results, as expected, a positive and significant relationship has been determined on the economic stability index of renewable energy consumption in Germany, Denmark, Italy, Switzerland and Sweden. However, contrary to what is expected in England and Belgium, a negative and significant relationship has been found. The reasons for the negative relationship determined in these two countries are thought to be the methods of financing renewable energy incentive mechanisms and the production of insufficient capacity energy due to climate caused imbalances. Amongst developing countries, in Egypt, Turkey, Taiwan, Pakistan, Indonesia, positive and significant effect of the renewable energy consumption on economic stability index has been found. Contrary to expectations, negative and statistically significant results have been detected in India and the Philippines. It is considered that high costs, the activities of the traditional energy lobby and the high rate of low qualified labor force are thought to be effective in explaining this negative relationship occuring in these two countries.
Considering the results of causality relations analysis in developed countries, a one-way relationship has been determined from renewable energy consumption to economic stability index in Australia, Germany and Norway, and from economic stability index to renewable energy consumption in Spain. In France, it has been detected that bilateral relationship exists. Within the framework of the analyzed period and country group, it has been proved that the "growth hypothesis" in Australia, Germany and Norway, "conservation hypothesis" in Spain and "feedback hypothesis" in France are valid. In developing countries, there is a causality relationship from renewable energy consumption to economic stability index in India, Mexico, Philippines and Peru, and from economic stability index to renewable energy consumption in Egypt and Taiwan. As a result, the "growth hypothesis" for India, Mexico, the Philippines and Peru and the "conservation hypothesis" for Egypt and Taiwan have been proven to be valid in the context of the period and country group discussed. Any causality could not be reached for Turkey. However, according to the long-term coefficient estimator, renewable and non-renewable energy consumption have been found to be positive and statistically significant on the economic stability index. But, it can be stated that the consumption of nonrenewable energy is more effective over the economic stability index, and this result is expected for countries where a large portion of energy demand supplied from fossil resources are observed in countries such as Turkey.
In the study, some suggestions are made in the context of renewable energy policies and practices in general. These suggestions are summarized as follows: The proper planning of the methods of financing high costs of production, installation, parts and maintenance services of renewable energy, the decent analysis of the suitability of the climate characteristics of the renewable energy installation regions to the relevant renewable energy type, increasing the efficiency of R&D expenditures in the field of renewable energy technology, improving the storage possibilities of electricity from renewable energy, making well-equipped workforce planning for the renewable energy sector, and preventing the cartel and lobbying activities that occur in the fossil fuel sector and cause imbalances in the market.


s2fieldsofstudy: Economics Business

text:
The Effect of Exports on Economic Growth in Indonesia With the Exchange Rate of Rupiah as A Moderated Variables

This study aims to determine the effect of export value on economic growth, and to see whether the exchange rate strengthens or weakens the relationship between exports and economic growth in Indonesia. The data in this study are secondary data taken from the official website of Bank Indonesia and the Central Bureau of Statistics, the data in this study amounted to 36 data where the data is quarterly data from 2010-2018. The results of the analysis show that the export value has a positive and significant effect on the level of economic growth in Indonesia for the period 2010 2018, and the rest is influenced by other variables, such as consumption, investment and government spending variables. The results of the analysis of the rupiah exchange rate as a moderating variable in this study strengthen the relationship between exports and Indonesia's economic growth.

INTRODUCTION
Every country has a wealth of natural resources that are different from one another, therefore it requires commodities that are not available from one country to another. With these commodities, trade will occur between one country and another, namely international trade or export-import activities. International trade, export and import, is an activity carried out by an exporter in buying and selling a commodity with a foreigner. Then exporters and importers make payments in foreign currency [1].
International trade cannot be separated from the driving factors of international trade itself. These factors, among others, arise from the urge to meet domestic needs, the availability of natural resources in a country, to benefit from this trade, differences in production factors, the desire for cooperation between countries, and the need for market expansion of a country. Export is an international trade activity that provides an incentive to grow domestic demand, which causes the growth of large factory industries, together with a stable political structure and flexible social institutions. In other words, exports reflect international trade activities, so that a developing country is likely to achieve economic progress on a par with more developed countries [2].
Exports have a very important role in increasing economic growth. Exports can supply the state budget through income and create an attractive investment climate [3]. In addition, exports also have an important role in developing the domestic product market, this role is to increase competition that encourages a country to increase production and use new technology in its production process.
Economic growth shows the extent to which economic activity will generate additional public income in a certain period. Because basically an economic activity is a process of using production factors to produce output, this process will in turn produce a flow of remuneration for the production factors owned by the community. With economic growth, it is expected that people's income as the owner of production factors will also increase [4].
Economic growth is a target that the economy wants to achieve in the long term, and as much as possible is consistent with economic growth in the short term. Economic growth can explain and simultaneously measure the development achievements of an economy, both within the scope of the country [5]. Reference [6] states that economic growth is an important indicator to see the success of economic development in a country in addition to other indicators such as unemployment rate, poverty rate, inflation rate.
It is hoped that rapid and stable economic growth will have a positive impact, either directly or indirectly, on other economic variables. In realizing the expected economic growth, the government in each country has several policy components that can be used to achieve the desired economic growth. One of them is through international trade policies. Economic relations between countries are an important factor affecting the economic development of each country [7]. This condition causes competitiveness as one of the determining factors in competition between countries in order to obtain benefits and the more open world economy. The advantages of opening up the world economy can be seen from the state of a country's balance of payments. Table 1 explains that exports always decline every year, this is due to several factors such as: (1) High import duties imposed by importing countries; (2) trade, protection of export destination countries; (3) depreciation of the Rupiah exchange rate against the US Dollar and (4) an increase in the price of fuel oil (BBM). Another problem is the increase in (BBM) causes the cost of logistics transportation to increase.
Indonesia's economic growth has always experienced a slowdown from 2011 to 2016, especially in 2015. The factors affecting this slowdown in economic growth include economic factors, namely (1) decreasing public purchasing power; and (2) decreased export performance.
Another factor that also affects the slowdown in economic growth is political factors. The increase in economic growth is always supported by high purchasing power of the people, the purchasing power of the community increases due to the Direct Cash Assistance (BLT) program. In addition, the decline in the economic slowdown was due to the decline in export performance in line with the drop in commodity prices, coupled with the increase in fuel prices.
The Rupiah exchange rate weakened in 2011 and had strengthened in 2011, but from 2012 to 2015 the Rupiah always depreciated. In 2016 the Rupiah appreciated by 4.64%. The depreciation of the Rupiah was due to several factors, including (1) deficit in the balance of payments; (2) limited foreign currency liquidity; (3) the continuation of the prolonged crisis in Greece; and (4) strengthen the American market or US economic recovery, where the US raises interest rates so that foreign investors in Indonesia withdraw their funds back. From this description, we would like to study the effect of exports on economic growth, which is moderated by the exchange rate.

International Trade Theory
The value theory used by Smith (1937) is the theory of production costs, although it originally used the labour value theory. Goods have a use value and an exchange value. Production costs determine the relative price of goods, so that two types of prices are created, namely the natural price and the market price in the long run, the market price will tend to equal the natural price, and with this theory the paradoxical concept of value arises [8].
The most amazing thought compiled by Walras (1874) about the theory of general equilibrium through four systems of equations simultaneously. The assumptions used by Walras are perfect competition, the amount of capital, labour, and limited land, while the production technology and consumer tastes are fixed.

International Trade Concept
According to law of the republic of Indonesia number 17 of 2006 concerning amendments to the laws number 10 of 1995 concerning customs article 1 point 14 export is the act of removing goods from the customs area. Meanwhile, the definition of import according to article 1 point 13 is the activity of bringing goods into the customs area. Export-import activities are trading activities of sale and purchase carried out internationally [9]. International trade is the trade carried out by residents of a country with residents of other countries on the basis of mutual agreements. The population in question can be between individuals, between individuals and the government of a country or the government of a country and the government of another country.

Export Concept
Export is removing goods from inside and outside the Indonesian customs area by complying with applicable regulations [10]. Reference [11] states that Exports are goods and services that are sold to foreign countries in exchange for other goods. Another opinion Advances in Economics, Business and Management Research, Volume 158 put forward exports as goods and services that are sold to residents of other countries, plus services provided to residents of that country in the form of transportation of capital and other things that help export these. According to [6] exports are various kinds of goods and services that are produced domestically and then sold abroad.

Economic Growth Theory
There are 2 major schools of economic growth theory, namely; (a) The historical school is a theory of linear economic growth (theory of stages of economic growth); (b) The analytical school is a modern theory of economic growth (expresses the growth process logically & consistently, is abstract, does not emphasize history. Economic growth is a long-term per capita output growth process that occurs when there is an increase in output originating from the internal process of the economy itself which is temporary [12]. Reference [13] states that the notion of economic growth is a long-term per capita output growth process that occurs when there is an increase in output that comes from the internal processes of the economy itself and is temporary in nature. This means that growth is self-generating in nature which produces strength or momentum for the continuity of economic growth in the next period.
Reference [2] states that economic growth is a steady process in which the production capacity of an economy increases over time and results in an increase in national income. Explains the notion of economic growth as a long-term increase in the ability of a country to provide various types of economic goods to society. These women grow according to the development of technology, ideology and institutional adjustments in the country.
From the description above, we want to examine how the influence of exports for economic growth and see whether the relationship between exports and economic growth is getting stronger or weaker with the variable rupiah exchange rate as a moderating variable. H2: Exports have an effect on Indonesia's economic growth, which is moderated by changes in the rupiah exchange rate

METHOD
This study uses a quantitative approach. A data source is anything that can provide information about data. Based on the source, the data are divided into two, namely primary data and secondary data. Data collection techniques in this study are: Library Studies. This research was conducted by collecting data and theories that are relevant to the problems to be studied by conducting a literature study of literature and other library materials such as articles, journals, books and previous research. The data analysis technique is regression analysis.

RESULTS AND DISCUSSION
The results of data analysis on the effect of exports on economic growth are shown in Table 2.
The results of simple linear regression in table 2 show the equation model: Y = -2.397 + 1.373X + e. The value of 1.373 indicates that if there is an increase in exports of Rp. 1, then economic growth will also grow by Rp. 1,373. From the results of the t test of exports for economic growth of 17.911, it is significant at 0.00 which is smaller than 0.05, so H1 is accepted, meaning that exports have a significant effect on economic growth in Indonesia.   Source: Analysis Data, 2019 Based on the output of table 3 analysis, it can be seen that the value of R Square is 0.904, this means that exports contribute 90.4% to economic growth and the remaining 9.6% is influenced by other variables such as investment, consumption and government spending.
Meanwhile, the results of the research on the effect of exports on economic growth, which were moderated by the rupiah exchange rate, as shown in table 4.  Table 5 shows that after the export value is multiplied by the exchange rate, which becomes the moderating variable, the R Square value increases from 0.904 to 0.968 or 96.8%. This means that the exchange rate, which is a moderating variable strengthens the effect of exports on economic growth by 6.8%.
The results of the analysis found that the value of exports has a positive effect on economic growth in Indonesia. This is in accordance with the classical theory put forward by Schumpeter's theory emphasizing the importance of entrepreneurial planning in realizing economic growth. In this theory, it is shown that entrepreneurs are a group that will continually make reforms or innovations in economic activity. These innovations include: introducing new goods, enhancing the efficient way of producing something, expanding the market for something goods to new markets, developing new sources of raw materials and making changes in the organization with the aim of increasing the efficiency of company activities.
By developing the production of goods and services to the international market in the form of exports, this can indirectly increase the rate of economic growth. This is what happened in Indonesia when seen in exports from 2010 to 2018 the value of exports increased, so the rate of economic growth in Indonesia also increased. If the export value decreases, Indonesia's economic growth will also decline. Export is an international trade activity that provides an incentive to grow domestic demand, which causes the growth of large factory industries, together with a stable political structure and flexible social institutions. In other words, exports reflect international trade activities, so that a developing country is likely to achieve economic progress on a par with more developed countries [2]. This research is in line with research conducted by [14]. Based on the analysis results, it is stated that in the period 2000-2015 the export variable had a positive and significant effect on GDP. The existence of a positive relationship between exports and economic growth in the long run means that policy making to promote exports will have an impact in the long term. This means that if the government continues to increase exports, in the long run this influence will be a factor that can increase Indonesia's GDP. The increased export value can increase APBN revenues and maintain balance sheet stability. In accordance with Keynes's theory that exports that are greater than imports can be high in economy, then the strategy of promoting exports is the right step.
The results of the study, with the rupiah exchange rate as a moderating variable, reinforce a stronger influence between exports and economic growth. This can be seen from the value of R Square, which increased to 96.8%. This indicates that after being moderated by the variance of the rupiah exchange rate, the effect of exports on economic growth is getting stronger. From these findings, it can be explained that changes in the rupiah exchange rate will have an impact on export relations and economic growth, because the export transactions carried out by the government and the private sector use the US dollar currency.
The exchange rate also greatly affects international trade, including exports. Reference [15] stated, the factors that influence export volume and export value depend on foreign income and output, the exchange rate of money and the relative price of domestic and foreign goods. If the value of foreign output increases, or the exchange rate against the currencies of other countries decreases, the volume of a country's export value will tend to increase, and vice versa. So that the amount and value of exports will be influenced by the relative prices between domestic and foreign goods, which in turn will depend on domestic prices, international prices and the exchange rate of the rupiah against the dollar.
In a floating exchange rate system, the depreciation or appreciation of the currency exchange rate will result in upward changes in both exports and imports. If the US dollar exchange rate depreciates, the value of the Advances in Economics, Business and Management Research, Volume 158 domestic currency weakens and it means that the value of the foreign currency exchange rate strengthens. Will cause exports to increase and imports to decrease. So, the foreign exchange rate has a direct relationship with the volume of exports. If the value of the United States exchanges rate increases, the export volume will also increase.

CONCLUSION
Exports have an influence on economic growth. If exports increase, economic growth will also increase economic growth. The rupiah exchange rate as a moderating variable strengthens the influence between exports and economic growth in 2010-2018. This is because every government and private export transaction uses the US dollar currency.


The Comparison of Business Regulations in Czech and Malaysian Economies in 2020

The paper compares the present business circumstances that the International Bank for Reconstruction and Development evaluates for the last 17 years annually. The data acquired from this data set are further analyzed in order to obtain insight into similarities and differences of the business regulation in selected economies with dissimilar political, cultural, historical and territorial background, completely different sizes and populations. Czech and Malay economies are assessed on the basis to 10 criteria selected from a very wide range of areas that clearly contribute to the quality of the business environment. The data were collected for the period between May 2018 and May 2019. The analysis shows that the Czech Republic and Malaysia have not similar business regulation, completely different position in the ranking of surveyed countries. This contribution uses data from the October report called Doing Business 2020. A more detailed assessment of individual subsections shows a significant difference in protecting minority investors, dealing with construction permits for business purposes, in trading across borders and differences in legal enforcement of valid contracts.

Introduction
Business environment and the comparison of business conditions is an important parameter of macroeconomic stability and an important determinant of economic growth (Commander and Svejnar 2011), (Korner et al. 2002) and (Odehnal and Michalek 2011). The impact of the macroeconomic business environment on the development of corporate social responsibility has been examined by (Hategan et al. 2018), (Krajnakova 2018). These authors have found out that the business environment can affect corporate social responsibility in a variety of ways, and even in unfavourable macroeconomic conditions, companies continue to participate in socially responsible activities due to the fact that they bring them long-term benefits. In order to verify this statement, a quantitative assessment of the quality of institutions is needed. The importance of business environment has been evaluated in other articles by other authors, for example (Carmeli 2001), (Slavik and Jurikova 2002), (Petrik 2001), (Klapper and Parker 2011), (Chavis et al. 2011) and(Young 2001).
This paper explores the International Bank for Reconstruction and Development studies, especially the last one from 2019, which focuses on defining individual aspects of the quality of the business environment worldwide. In particular, we will focus on assessing the conditions for doing business in Malaysia and the Czech Republic.
Business conditions in various countries have been assessed for the last 17 years by World Bank Group and International Bank for Reconstruction. Then, the results are made public in final reports named "Doing Business" (DB 2019). The study affords quantitative indicators containing 12 sections of the business environment in 190 economies. The goal of the periodical studies is to afford objective data for practice by governments in proposing to publish business regulatory policies and to advance study on the important topics of the regulatory surroundings for companies. The yearbook Doing Business 2020 is the 17th in sequences of summary exploring the rules that magnify enterprise activity and those that confine it.

Methodology and Procedure for Assessing the Quality of Business Environment
The current report compares business regulations and rules in 190 countries around the world practicing 12 main indices. The overall indicator ranks each compared country in the global ranking like the result of the average value of only 10 indicators. The total overview completes further 7 territorial groups ( Calculation of scorings is only available for the Doing Business 2020 annual report. The comparability of the prior years is influenced by year-to-year changing numbers of economies, indicators and methodology. The recalculation of each methodology extension for one year took place in order to give corresponding index values and ranking for the previous year. The data which were obtained from Doing Business 2020 study cover two following areas: • AREA I. Indicators characterizing the complexity and cost of regulatory processes in the monitored country in the form of an assessment: Within the monitored areas, the indicators are evaluated according to 3-6 additional sub-criteria, which ensures the objectivity of the evaluation and, in particular, the expertise because all individual assessments are done by competent auditing and legal offices in each country. Each of the 10 indicators has the same weight in the overall rating, but it does not mean that the country ranked first in the overall rankings ranks first in sub-ratings. What is important is the average placement of the country according to all individual sub-areas.

Ease of Doing Business Ranking and Ease of Doing Business Score Results
The comparison of countries shown in the ease of doing business (EODB) ranking is done with regard to regulatory best practice; countries are benchmarked to each other in the ease of doing business score, indicating the entire range to the top regulatory performance on each Doing Business index. In this range, the topmost record is the example of the best regulatory achievement on the indicator among all the countries since 2005 or the third year when data for the index were processed.
When the analysis over years is carried out, the ease of doing business ranking shows, how much a country´s administrative climate for local entrepreneurs has changed over time in absolute values, while in the ease of doing business ranking only the amount of administrative climate transformation in relation to other countries can be presented. The very top countries in the ease of doing business list (see Tab. 1) are those with permanently well-created business climate or those having favourable administrative surroundings due to extensive enhancement throughout the years. The five highest ranking economies of this year -New Zealand, Singapore, Hong Kong, Denmark and Korea Republic -represent a business-friendly climate and they have been leading the ranking since 2010.

Malaysia and the Czech Republic -details of Doing Business conditions
The evaluation of the situation in the countries under review is shown in Table 2. In terms of complexity and cost of regulatory processes, three out of six indicators in Malaysia are clearly better evaluated than in the Czech Republic, while the remaining three are better in the latter. Malaysia is much better rated in dealing with building permits. Malaysia scores higher than the OECD average or the East Asia Pacific region in this assessment, mainly due to the very low number of days and procedures to build a warehouse. Procedure is any interaction between the managers or employees of a company and external parties. There are only insignificant differences in other sub-indicators. The costs are a percentage of the value of the warehouse and the quality assurance index based on six other indices -quality assurance after construction, quality assurance during construction, quality assurance before construction, quality of building regulations, liability and insurance regimes and indices of professional certification.
On the contrary, the Czech Republic is significantly better than Malaysia in Trading across borders. The Czech Republic receives a better score than the OECD average, East Asia  Pacific area as well. It is the recording of time and costs associated with the logistics process for exporting and importing goods, time and cost measurement associated with the following procedures -national transport, border compliance, and document compliance -as part of the overall process of shipment, import and export of goods. Although the database contains and reports data on time and cost of local transport, it is not used to calculate the index of cross-border trading or assess its ease. The main point is that local transport time and costs are affected by many external factors. Among them, the topography, geography, and general infrastructure of the transit area, the location of warehouses where goods are kept, road capacity and proximity to the nearest port or border. Therefore, they are not directly influenced by trade policies and economic improvements of the country in question. The assessment of the situation of the monitored countries shows the following results (see Table  3). Concerning the strength of legal institutions, three of the four indicators are clearly in favor of Malaysia, whereas the remaining one is better in case of the Czech Republic. Malaysia is doing significantly better in Protecting Minority Investors, Enforcing Contracts and Getting Credit. The fourth sub-indicator -Resolving Insolvency -is favorable for the Czech Republic. The data is derived from a questionnaire collected by company and securities lawyers and is based on company law, civil code of law, court rules of evidence and the disposition of securities. Protection of minority investors helps prevent conflicts of interest by means of a set of indices.
These scores are the sum of the extent of conflict of interest regulation index and the extent of shareholder governance indicator. The indicator called Enforcement Contract measures the cost and time of needed to solve commercial disputes by local courts of first instance and the index of quality of litigation. It also assesses whether or not the country in question has adopted best practices supporting the quality and efficiency of the justice system.  1 1 : Strength of insolvency framework index (0-16) 7.5 14 7.0/11.9 The Resolving insolvency category is a weak point in evaluating business conditions in Malaysia. It is measured the time, cost and outcome of insolvency proceedings involving domestic entities as well as the strength of the legal framework applicable to judicial liquidation and reorganization proceedings. Data for solving insolvency indicators are derived from the replies to questionnaire created by local insolvency trustees and verified by studying laws and regulations as well as public information on insolvency systems. The ranking of countries according to the ease of solving insolvency is determined by classifying their score for solving insolvency. The indicator is counted simply as an average of the score of Recovery Rate and Strength of Insolvency Framework Score.

Discussion
This paper focuses on the assessment of business conditions published by the International Bank for Reconstruction and Development this year. This institution has been evaluating the conditions for doing business in 10 different areas according to a very sophisticated methodology for 17 years. The authors' interest was to compare the conditions for doing business in Malaysia and the Czech Republic. These countries have a very different history, politics and culture. Nonetheless, the basic dissimilarity are their respective areas and populations. Malaysia is four times larger and has nearly 3 times more inhabitants. Malaysia ranked 12th and Czech Republic 41st among 190 countries. It is clear that the conditions for doing business in both countries are different, but there are some similarities and in some areas Malaysia has its weaknesses. In the overall evaluation, criteria relating to the complexity and cost of regulatory processes are analyzed first, followed by criteria relating to the strength of legal institutions. The complexity and cost of regulatory processes are defined by 6 indicators. There is the only indicator of business conditions that both these countries have identical, that is Registering Property.
Differences are evident in the indicators Dealing with Construction Permits, Starting a Business and Getting Electricity. Establishing your own company in the conditions of the Malaysian economy is easier than in the Czech economy, but due to a large number of procedures, days and, ultimately, costs, the establishment of a company in both countries is very difficult. The fundamental difference between the two economies can be seen in the indicator Dealing with Construction Permits. This indicator clearly shows the very low number of procedures required to obtain a building permit, thus reducing the time required for it. The differences between the two economies are so significant that Malaysia is in this respect gaining a significant advantage over the Czech Republic in the overall ranking. Malaysia is better ranking in the area of Getting Electricity. On the other hand, the Czech Republic boasts of better conditions for doing business in the areas of Paying Taxes or Trading Across Borders. Still, even these advantages cannot move the Czech economy among the top 40 economies. In the second important area of evaluation -Strength of Legal Institutions -almost all criteria are evaluated in favor of Malaysia. Enforcing Contracts, Getting Credit and especially Protecting Minority Investors are areas where Malaysia is gaining a significant advantage over the Czech  (2) Getting Electricity (4) Registering Property Getting Credit (37) Protecting Investors (2) Paying Taxes (80) Trading Across Borders (49) Enforcing Contracts (35) Resolving Insolvency (40)

Malaysia
Republic thanks to the strength of its legal institutions. Only one area out of four resulted in favor of the Czech Republic, namely Resolving Insolvency. Malaysia has been continuously improving its Doing Business rankings over the past three years through its reforms. It was during these years that it carried out nine major reforms. For instance, in 2019 Malaysia streamlined the process of Dealing with Construction Permits by eliminating the road and drainage inspection performed by Kuala Lumpur City Hall. In 2018, Malaysia made starting a business easier by introducing an online registration system for goods and service tax. Unfortunately, the position of the Czech Republic has been declining over the past three years. The position of the Czech Republic in the Doing Business 2020 study is worst in seven years. The last reform that could have had a positive effect, took place in 2017 -the Czech Republic made starting a business less expensive by introducing lower fees for simple limited liability companies. Unfortunately, the positive effect was ruined by the measure whereby the Czech Republic made paying taxes more complicated by introducing new requirements for filing VAT control statements. Reforms that would simplify doing business and make it more efficient are not detected in the Czech economy. This is a major problem and this situation has clearly manifested itself in the current ranking of the Czech economy among all the evaluated economies of the world.


text:
Legal Study on Non-Commercial Risk Investment in Indonesia

The purpose of this study is to find out about the legal guarantees given by the Government of Indonesia of non-commercial risk investment. Therefore, investment is an important pillar in the economic growth of a country due to the country's economy needs to grow sustainably requires continuous capital. In Indonesian income per capita is very low, the government is trying to attract investors to invest their capital by managing a variety of available resources, by providing a clear legal regulated in Law No. 25/2007 on investment, and various other supporting regulations, which protects the interests of investors. The problem occurs when a country experiences a political crisis, where this can lead to non-commercial risks greatly affect investors, in this study formulate the problem how does the legal guarantee from the government if there is a non-commercial risk in terms of investment to investors. To answer this problem, a normative legal approach is used will analyze the legal material by referring to legal norms in the applicable laws and regulations. The results show that Article 7 of Law No. 25/2007 provides protection and legal certainty for investors, if there is a non-commercial risk associated with political turmoil, the government will not nationalize and take over assets to investors due Indonesia as a developing country is still dire need foreign and domestic investors to invest their capital in our country to grow national

I. INTRODUCTION
The presence of foreign investors in a country has quite extensive benefits due to absorbing labor in the recipient country of capital, adds to the country's foreign exchange due to many foreign investors are oriented to export-import; also increase state income from the tax sector; and the transfer of technology and knowledge transfer brought by investors. By reviewing this point of view, investors are very instrumental in the economic development of a country. For this reason, various improvements have been made by the government, aimed to create a conducive climate for investment in Indonesia, by the issuance of Law No. 25/2007 on Investment, the existence of this act will be able to guarantee legal certainty, comfort, and security for investors.
The investors in investing their capital expect there is a result or profit in running their business, hope the capital invested remains safe, in the sense of legal protection. If an investor experience of losses in running and managing his business, then for investors this is a business risk should be borne, as stated by reference [1], as follows: "An individual who invests funds in any type of security or business undertaking, or who even holds his assets in cash form, assumes the possibility of loss, or conversely, has an opportunity to gain. Four major risks or uncertainties for investors might be distinguished as follows: 1. business risk; 2. interest rate risk; 3. marked risk; 4. purchasing power risk. To select an investment, an investor had to decide the degree of business risk he wishes to assume. He has a choice. " For the investors before deciding to invest their capital, firstly conducted a feasibility study of the business prospects he would run. If an investor will invest their capital, the investor should sign a letter of intent accompanied by a preferability study, include legislation relating to the investment to be made. Issues will arise if in conducting their business, investors experience noncommercial risk. This research formulates the problem of the guarantee of legal certainty from the government event of a non-commercial risk to investors. This research is expected to be useful both theoretically and practically. Theoretical benefits in the sense of being able to answer the problems faced, this research may be useful as a contribution to investors and the public regarding Investment in Indonesia, especially relating to the assurance of legal certainty of noncommercial risk.

II. RESEARCH METHODS
This research is normative legal research which is one type of legal research. The normative legal approach is used to analyze primary legal materials, according to the Law No. 25 of 2007 concerning Investment, and Secondary legal materials, various liter that support this writing, as well as tertiary legal materials in the form of law dictionaries and Indonesian dictionaries. This approach is conducted by referring to the legal norms outlined in the legislation and court decisions. The process of gathering legal material is conducted by the procedure of identifying and inventorying positive law as a preliminary activity, analyzed based on descriptive normative analysis, by describing and explaining in detail all related to the issues raised.

Concept of Welfare State
The concept of the welfare state is used due to the concept of welfare refers to social welfare development which is a series of planned and institutionalized activities aimed at improving the standards and quality of human life [2]. The concept of welfare in the context of national development can be defined as all policies and programs conducted by the government, business world, and civil society to overcome social problems and meet human needs with economic improvement.
In this case, the concept of the Welfare State focuses on social welfare and economic development, which reference [3] calls antithetical notions. Economic development is concerned with the growth of capital accumulation and economic benefits, while social welfare is related to altruism, social rights, and asset redistribution. Economic development is conducted by increasing wealth and improving quality and living standards.
Based on the concept of the Welfare State through economic development, to realize and improve prosperity, acceleration, improvement, and economic development should be done through national economic development in line with the state constitution which has mandated national economic development should be based on democratic principles which create the realization of the sovereignty Indonesian economy. Economic development based on democratic principles is a manifestation of people's economy as stipulated in Article 33 of the 1945 Constitution which is the normative, philosophical basis of a people's economic system [4].

The Concept of Investment and Capital Investment
Regarding investment, it has a broader understanding due to cover both direct investment and indirect investment, whereas it has more connotation to direct investment. In general, the investment can be interpreted as an activity conducted both persons and legal entities, an effort to increase and/or maintain its capital value, whether in the form of cash, equipment, immovable assets, rights for intellectual property, as well as expertise.
According to the economic point which views the investment as one factor of production, the investment can be interpreted as: 1. an action for buying shares, bonds, or other investments, 2. an act of buying capital goods, 3. utilization of funds available for production for future income [5].
According to the Investment Law No. 25 of 2007, Article 1 paragraph [6], investment is defined as all forms of investment activities, both by domestic investors and foreign investors to do business in the territory of the Republic of Indonesia.

Concept of Non-commercial Risk
If it is examined based on the word non-commercial, it means something that is done by a person or legal entity to seek profit. However, the non-commercial risk referred to this research is a state of the country which at the time was in a state of political turmoil, it also affected the state of the country's economy to the impact of a noncommercial risk for investors.
This risk is referred to as political risk, due to closely related to the political conditions of a country. This Political Risk is also related to the possibility of changes in statutory provisions which result in a decrease in the estimated income of an investment or even a total loss of the invested capital. For companies operating abroad, the economic and political stability of the country concerned will need to be considered to avoid a high country's risk. Likewise, the current situation of all countries has temporarily collapsed in the economy due to the COVID-19 which has plagued almost all countries, which has resulted in the economy of each country disturbed. This is categorized as a non-commercial risk.

Investment Guarantee Law for Investors
The purpose of investment or investment only be achieved if the supporting factors hinder the investment climate can be overcome through: 1. Improved coordination between central and regional government agencies, 2. Creation of an efficient bureaucracy for legal certainty in the field of investment, 3. Competitive economic costs; and 4. A conducive business climate in the field of employment and business security. Improvements in various factors, it is hoped investment has an important role in improving the economy and employment growth. Governments around the world are currently competing to create a better business climate to support investment activities. Whether we realize it or not, foreign and domestic investment is very beneficial for economic growth. High economic growth can be supported by several factors, including a) support of trade and investment deregulation policies; b) a conducive business climate to accelerate the pace of investment increase, and c) also the existence of international confidence in the domestic economic actors to conduct various forms of old joint venture work.
The world economy is characterized by increasingly fierce international competition investment policies should be encouraged to create national economic competitiveness to encourage the integration of the Indonesian economy into the global economy. The Investment Law should be able to accommodate competition. There are three qualities created by the Investment Law, to encourage foreign investment as follows: 1) stability; 2) predictability; 3) fairness. The first and second points are prerequisites for the economic system to function. Predictability requires the law to bring certainty. Investors will be interested in a country if he believes the law will protect investments made.
Legal certainty is as important as economic opportunity and political stability. Second, it should be able to create the stability that is balanced or accommodates competing interests in society. In this case, the Investment Law accommodates the interests of foreign capital and protect local entrepreneurs or small businesses. Third, fairness or equality such as the equality of all people or parties before the law, equal treatment of all people and the existence of a standard pattern of government policies by many experts emphasized as a prerequisite for the functioning of market mechanisms and

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preventing excessive bureaucratic actions. To realize a legal system supports the investment climate, clear rules are needed ranging from permits for business to the costs that should be incurred for the operation of the company.
The key to achieving this condition is the rule of law enforcement.
Another thing often a concern for potential foreign investors is the issue of legal guarantees from recipient countries, especially those relating to non-commercial risk. It is rather difficult to find, even in countries whose industries are quite advanced, free from political risks. However, in developing countries where the government system is still unstable, the possibility of political risk is indeed quite high. When viewed in terms of security and business convenience it might be safer for investors to invest in developed countries because in developed countries, all the rules are arranged in an orderly manner only the expected level of profit may not be too much, due to the production costs are quite high, competition between similar companies is quite tight.
To expand the business, one option is to invest in developing countries, because besides production costs are not too expensive, the production market is still open, and competition is not too tight. It's just the political risks to be faced are quite high. The political risk (political risk) contains at least four things as stated by reference [7] as follows: 1. Discontinuity, such as the existence of drastic changes in the business environment, 2. Uncertainty (uncertainty), such as the existence of changes that are very difficult to predict and / or, anticipated beforehand, 3. Political forces mean changes are caused or driven by political forces, 4. Impact in the business sector (business impact), meaning a change in political policy results in losses and / or reductions or other objectives of the company. Investors need to note the risks will be faced. It needs to be emphasized what is a non-commercial risk as to the existence of action from the state or the existence of an event related to social upheaval in a country which has direct and indirect consequences on foreign companies. One form of non-commercial risk is expropriation or nationalization of foreign companies. The feared risk is not a business risk, but non-commercial risk. Business risks faced by investors are not uncommon, meaning that in every business activity to be conducted should be risks, but for foreign investors who are generally multinational companies, have sufficient human resources, adequate technology, strong capital and have access to financial institutions, both national and international, by using professional staff, a business can be calculated accurately. The level of business risk will be faced can be minimized as small as possible.
Regarding non-commercial risks, for the Indonesian government, namely the takeover or nationalization of foreign companies will not conduct, except by law. The spirit of the nationalization of foreign companies has also occurred in Indonesia. This happened when Indonesia was only a few years independent, then there was a kind of thought that the presence of foreign companies was an obstacle to the realization of sovereignty in the economic field. But there are other thoughts, that the presence of foreign investors still needed considering indigenous entrepreneurs and skilled workers owned by the Government of Indonesia are inadequate [8]. Finally, in 1958, the Government issued Law No. 86 of 1958 concerning the Nationalization of Dutch Companies. In considering the issuance of the law it was stated: "The nationalization of the Dutch-owned companies is intended to provide maximum benefits to the people of Indonesia and also to strengthen national security and defense". Related to this nationalization, it is explicitly stated in Article 7 paragraph (1) of the Capital Market Law No. 25/2007.
It is forced to do, then the investor will be given compensation in the amount determined based on market prices. If there is no agreement regarding the intended compensation, then investment dispute resolution will be taken to the arbitration institution. From this point of view, for non-commercial risks, for example nationalizing foreign companies, providing guarantees is, if forced to do, then compensation will be given. Other risks that occurred in non-commercial risk are the declining value of the local currency against foreign currencies, social unrest and civil war. For this type of risk, insurance companies usually do not want to guarantee. This noncommercial risk guarantee can be borne solely by the host country unilaterally, through bilateral agreements on investment guarantees and multilateral agreements [9].
To further enhance the confidence of foreign investors to invest in Indonesia, the Indonesian Government made bilateral agreements with various countries of origin of investors. This investment agreement creates several principles that are generally applicable to international relations. The principles referred to include: First, the principle of a national treatment clause, meaning each party will provide the same treatment to the citizens of the parties as granted by the parties to their citizens. Second, the principle of a most favored nation clause, citizens of the parties will get fair and equitable treatment in terms of foreign investment. Citizens of the parties will not get less treatment compared to the treatment given to citizens of other parties [10].
Observing the presence of foreign investors in a country, especially in developing countries, is quite important as a driver of the economy, to eliminate the doubts of foreign investors in investing given that noncommercial risk is very likely to occur, the World Bank has again made a convention, which is related to noncommercial risk or often also referred to as political risk (political risk).
This convention is known as The Convention Establishing the Multilateral Investment Guarantee (MIGA). This convention was held in Seoul-South Korea in 1985, the MIGA convention is often referred to the 1985 Seoul Convention. MIGA is a World Bank Group based in Washington DC.
The State of Indonesia itself has ratified this convention based on Presidential Decree Number 31 of 1986 [11]. The background of the holding of this convention outlined in the Preamble was stated among others the Multilateral Investment Guarantee Agency could play an important role to encourage investment foreign investment through investment guarantee programs both regional and national as well as noncommercial risk guarantee programs that may be faced by investors.
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