The Effect of Investment Toward Economic Growth in The Local Economy

Abstract

This study aims to analyze the role of investment such as total foreign direct investment and domestic direct investment, inflation, and road infrastructure to the economic growth of South Sumatera Province, Indonesia. The data used is time series data from 2007-2016, while the scope of this study is 15 districts/cities in South Sumatera Province. The data is sourced from the publication of Central Bureau of Statistics Indonesia (BPS) and the publication of the Investment Coordinating Board (BKPM) South Sumatera Province. The analysis method in this study is quantitative analysis using data panel multiple regression model. The finding of this study showed that investment, inflation, and road infrastructure development jointly has positive and significant effect on the economic growth. Meanwhile, partially indicating that investment and road infrastructure have positive and significant impact to economic growth, while inflation has positive sign but insignificant effect on economic growth of South Sumatera Province.