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

Miftah Nasution; M. Shabri Abd. Majid; Chenny Seftarita

doi:10.56225/ijfeb.v1i2.30

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.

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