| dc.description.abstract | This study aims to analyze the determining factors of investment attractiveness and their relationship with regional economic growth in Indonesia. The variables examined include infrastructure, labor, government expenditure, inflation, and crime as independent variables; investment as an intervening variable; and regional economic growth as the dependent variable.
The research data consist of panel data comprising cross-sectional data from 34 provinces in Indonesia and time-series data for the 2018-2023 period. This study employs path analysis using the Partial Least Square (PLS) approach.
The results show that infrastructure, labor, government expenditure, and inflation have a positive and significant effect on investment, while crime has a negative and significant effect. In addition, labor, government expenditure, and crime are proven to have a positive and significant effect on regional economic growth; however, inflation has a positive but insignificant effect on regional economic growth. Meanwhile, infrastructure has a negative and significant effect on regional economic growth. Indirectly, infrastructure, labor, government expenditure, and inflation are able to enhance regional economic growth through increased investment, whereas crime reduces regional economic growth through the same channel. These findings are consistent with the Harrod-Domar Theory and Endogenous Growth Theory, which emphasize the role of investment as the main driving force of economic growth. The policy implications of this study highlight the importance of improving infrastructure quality, strengthening labor capacity, enhancing the effectiveness of government spending, controlling inflation, and reducing crime rates to create a conducive investment climate. Thus, the results of this study can serve as strategic input for local governments and investors in strengthening investment attractiveness and promoting sustainable regional economic growth. | en_US |
