Determinants of Regional Economics Growth

Sri Nawatmi; Agung Nusantara; Agus Budi Santosa

doi:10.24856/mem.v35i1.1208

Determinants of Regional Economics Growth

Sri Nawatmi, Agung Nusantara, Agus Budi Santosa

Abstract

This study aims to determine what factors influence regional economic growth. The analysis technique used is to combine time series data and cross-section (pooling data). Time-series data from 2015 - 2017 and cross section data consisting of 34 provinces in Indonesia. The results of the model test using the redundant fixed effect test and random effect-Hausman test show that the best model is the fixed effect model (FEM). Regression results show that only the HDI (Human Development Index) variable is not significant, the other variables (fiscal decentralization, capital, and labor) have a significant positive effect on regional economic growth.

Keywords

Regional economic growth; pooling data; fixed effect model.

Full Text:

PDF

References

Akai, N., & Sakata, M. (2000). Fiscal Decentralization, Commitment and Regional Inequality: Evidence from State – Level Cross – Sectorial Data for the United State. CIRJE Discussion Papers.

Akai, N., & Sakata, M. (2002). Fiscal Decentralization Contributes to Economic Growth: Evidence from State – Level Cross Section Data for The United State. Journal of Urban Economics, 52, 93-108.

Bahl, R. (1998). Implementation Rules for Fiscal Decentralization, Washing-ton D.C.: The World Bank Institute.

Bahl, R. & Wallace, S (2006). Fiscal Decentralization and Fiscal Equalization within Regions: The Case of Rusia. Journal of Public Budgeting, Accounting and Financial Management. 18(1), 27-58.

Brothaler, J. & Getzner, M. (2010). Effect of Decentralization on Public Sector Growth in Austria. Public Finance and Management, 10(1), 169-205.

Domar, Evsey. (1946). Capital Expansion Rate of Growth and Employment. Economertica, 14(2): 137-147. Doi: 10.2307/1905364.JSTOR 1905364.

Harrod, Roy F. (1939). An Essay in Dynamic Theory. The Economic Journal.49(197),14-33. doi: 10.2307/2225181.JSTOR 2225181.

Nelson, M. A. (1986). An empirical Analysis of State and Local Tax Structure in the Centex of The Leviathan Model of Government. Public Choice, 49(3), 283-294.

Oates, W. E. (1993). Fiscal Federalism. New York: Harcout Brace Jraovich.

Oates, W. E. (1993). Fiscal Decentrali¬za-tion And Economic Development. National Tax Journal, 2(46), 237-243.

Ricardo, David. (1817). On The Principles of Political Economy and Taxation in Batoche Books, Kitchener, Ontario 2001.

Romer, P. (1994). The Origin of Endogenous Growth. Journal Eco-nomic Perspective, 8(1). 3-22.

Simanjuntak, Robert A. (2002). Transfer Pusat Ke Daerah: Konsep dan Praktek di Beberapa Negara. Dalam Dana Alokasi Umum: Konsep, Hambatan dan Prospek di Era Otonomi Daerah. Kompas. Jakarta.

Sobari, A. (2011). Dampak Desentralisasi Fiskal Terhadap Pembangunan Sosial Ekonomi Daerah Di Indonesia. Tesis. Bogor: IPB.

Solow, M. (1996). A Contribution to The Theory Of Economic Growth. Quarterly Journal of economics, 70(1), 65-94.

Suparno. 2010. Analisis Pertumbuhan Ekonomi dan Pengurangan Kemiskinan: Studi Pro Poor Growth Policy di Indonesia. Tesis. Bogor: Institut Pertanian Bogor.

Todaro, M. P. & Smith, S. C. (2006). Pembangunan Ekonomi. Jilid 1. Edisi 9. Alih Bahasa. Jakarta: Erlangga.

Zhang, T. & Zhou, HF. (1998). Fiscal Decentralization, Public Spending and Economic Growth in China. Journal of Public Economics, 69, 221-240.

DOI: http://dx.doi.org/10.24856/mem.v35i1.1208