Determining Factors of Economic Growth and Poverty in West Kalimantan

Abstract

The abundant wealth of natural resources in the West Kalimantan Province, such as bauxite, palm oil, rubber, and coconut, underlies the region's great potential for economic growth. Therefore, being able to identify the factors that influence the province's economic growth and poverty is of vital importance. This study aims to contribute to understanding the primary factors influencing the economic growth and poverty of the region. The objective of this research is to investigate and assess how the economic growth and poverty of West Kalimantan Province, spanning from 2015 to 2021, is impacted by variables such as per capita spending, investment, and government expenditure. This is particularly significant due to the province's diverse regions, each possessing distinct attributes and confronting varying obstacles in pursuing enduring economic development. The analysis employs both the multiple linear approach and the path analysis technique. The findings revealed that the per capita expenditure factor exhibited a partial yet meaningful and favorable impact on economic growth. Meanwhile, the investment factor positively influenced economic growth, although it lacked statistical significance. On the other hand, the government expenditure factor yielded a neutral yet substantial effect on economic growth. In terms of poverty, the per capita expenditure variable demonstrated a non-significant negative impact, while the investment variable exhibited a positive influence on poverty without achieving statistical significance. Similarly, the government expenditure variable positively affected poverty, but this effect was not statistically significant. Notably, the economic growth variable significantly and adversely affected poverty. The outcomes derived from the path analysis indicated that per capita expenditure, investment, and government expenditure significantly influenced poverty while displaying no significant effects on economic growth.