The Effects of Regional Expenditure, Inflation, and Credit Interest Rate on the Domestic Investment in Sumatera Province, Indonesia

Authors

  • Miftah Nasution Department of Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Indonesia
  • M. Shabri Abd. Majid Department of Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Indonesia
  • Chenny Seftarita Department of Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Indonesia

DOI:

https://doi.org/10.56225/ijfeb.v1i2.30

Keywords:

regional expenditure, inflation, credit interest rate, domestic investment

Abstract

The economic growth in a certain region is unity by a national development plan based on the autonomy as implemented by the region and formulation of the national development resource that leads to the improvement of regional development performance for realising fair public welfare without any deception. Domestic investment is an indicator of success for development investment in the region. This research was associative quantitative to identify the effect of regional expenditure, inflation, and interest rate on domestic investment in ten provinces of Sumatera from 2010 to 2020. This research used panel data. Regional expenditure, inflation, and interest rate simultaneously affected domestic investment. Regional expenditure partially had positive and insignificant effects on domestic investment. Inflation had a negative effect without showing significance on domestic investment, while an interest rate partially had a negative effect by showing significance for domestic investment. The coefficient of determination shows that regional expenditure, inflation, and interest rate yielded 39.91% for domestic investment.

References

Adams, S. (2009). Foreign direct investment, domestic investment, and economic growth in Sub-Saharan Africa. Journal of Policy Modeling, 31(6), 939–949. https://doi.org/10.1016/j.jpolmod.2009.03.003

Amalia, F. (2017). Flypaper Effect of Regional Expenditure and It’s Impact to Regional Inequality in Indonesia. Signifikan: Jurnal Ilmu Ekonomi, 6(1), 125–138.

Arestis, P., & Sawyer, M. (2003). Reinventing fiscal policy. Journal of Post Keynesian Economics, 26(1), 3–25.

Aristeus, S. (2021). Transplantation, Legal Adoption, Harmonization of OMNIBUS LAW and Investment Law. Jurnal Penelitian Hukum De Jure Vol, 21(4), 507–516.

Colecchia, A., & Schreyer, P. (2002). ICT investment and economic growth in the 1990s: is the United States a unique case?: a comparative study of nine OECD countries. Review of Economic Dynamics, 5(2), 408–442.

Davidson, P. (1968). Money, portfolio balance, capital accumulation, and economic growth. Econometrica: Journal of the Econometric Society, 36(2), 291–321.

Ernita, D., Amar, S., & Syofyan, E. (2013). Analysis of Economic Growth, Investment and Consumption in Indonesia. Journal of Economic Studies, 1(02), 176–193.

Firdaus, F., & Endri, E. (2020). Financial Statement Analysis : Evidence from Indonesian Bank BUKU IV. International Journal of Innovative Science and Research Technology, 5(4), 455–461.

Gisore, N., Kiprop, S., Kalio, A., Ochieng, J., & Kibet, L. (2014). Effect of government expenditure on economic growth in East Africa: A disaggregated model. European Journal of Business and Social Sciences, 3(8), 289–304.

Iqbal, M., Firdaus, M., Juanda, B., & Hakim, D. B. (2020). Impact of economic growth on regional development in Jambi Province. Jurnal Perspektif Pembiayaan Dan Pembangunan Daerah, 7(4), 405–420. https://doi.org/10.22437/ppd.v7i4.8275

Krugman, P. (1999). What happened to Asia. In Global competition and integration (pp. 315–327). Springer.

Latumaerissa, J. R. (2011). Bank dan Lembaga Keuangan Lain. Salemba Empat.

Mentari, N. (2021). Disgorgement (Fund): A New Era of Investor Protection in the Capital Market. JIL: Journal of Indonesian Law, 2(1), 106–124.

Milbourne, R., Otto, G., & Voss, G. (2003). Public investment and economic growth. Applied Economics, 35(5), 527–540.

Nasution, Y. S. J., & Siregar, R. (2020). The Influence of Minimum Wage and Manpower toward Domestic Investment In North Sumatra. Accounting and Business Journal, 2(2), 44–52.

Soekapdjo, S., Tribudhi, D. A., Hariyanti, D., & Nugroho, L. (2020). Factors affecting economic growth in central java. International Journal of Commerce and Finance, 6(1), 155–165.

Tajuddin, I. (2021). The Influence of Inflation , Domestic Investment and Foreign Investment on Economic Growth. Point of View Research Economic Development, 2(2), 68–79.

Utami, W. R., Hartoyo, S., & Maulana, T. N. A. (2015). The Effect of internal and external factors on stock Return: empirical evidence from the Indonesian construction subsector. Asian Journal of Business and Management, 3(5), 370–377.

Downloads

Published

2022-06-30

How to Cite

Nasution, M., Majid, M. S. A., & Seftarita, C. (2022). The Effects of Regional Expenditure, Inflation, and Credit Interest Rate on the Domestic Investment in Sumatera Province, Indonesia. International Journal of Finance, Economics and Business, 1(2), 158–165. https://doi.org/10.56225/ijfeb.v1i2.30

Issue

Section

Articles