The Effect of Fiscal Policy and Foreign Direct Investment on Regional Economy in Indonesia

Authors

  • Agus Tri Basuki Ph.D. Student on Economics and Business Faculty Universitas Sebelas Maret Surakarta Universitas Muhammadiyah Yogyakarta. Yogyakarta
  • Yunastiti Purwaningsih Universitas Sebelas Maret. Surakarta
  • Albertus Maqnus Soesilo Universitas Sebelas Maret. Surakarta
  • Mulyanto Mulyanto Universitas Sebelas Maret. Surakarta

DOI:

https://doi.org/10.18196/jesp.21.1.5031

Keywords:

Economic growth, Panel data regression, Fiscal policy, Fiscal capacity.

Abstract

The purpose of this study was to analyze the influence of the poor population, government spending and foreign investment on regional economic growth in 20 provinces and divided into 2 regions, then compare the effectiveness of fiscal policies in the 2 regions. The paper utilizes the fixed‐effects and random‐effects techniques to estimate the panel regressions. The results showed that the right fiscal policy could increase economic growth in both the western and eastern regions of Indonesia. For the western region, revenue sharing is less effective than the eastern region in increasing economic growth, but conversely government spending on education, health and marine in the western region is more effective than the eastern region in increasing economic growth.

Author Biography

Agus Tri Basuki, Ph.D. Student on Economics and Business Faculty Universitas Sebelas Maret Surakarta Universitas Muhammadiyah Yogyakarta. Yogyakarta

Biography Indexing: G-Scholar

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Published

2020-04-24

How to Cite

Basuki, A. T., Purwaningsih, Y., Soesilo, A. M., & Mulyanto, M. (2020). The Effect of Fiscal Policy and Foreign Direct Investment on Regional Economy in Indonesia. Jurnal Ekonomi &Amp; Studi Pembangunan, 21(1), 53–68. https://doi.org/10.18196/jesp.21.1.5031

Issue

Vol. 21 No. 1: April 2020

Section

Articles

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