Title: DETERMINANTS OF GROWTH ECONOMY PROVINSI WEST SUMATRA
Authors:
Yasnida, Yolanda*, M. Sidik Priadana and Herry Wira Wibawa
Abstract:
Economic growth is the main indicator for a country to know its economic condition. To measure the economic progress by observing the pace of economic growth achieved by the regions, which is evidenced by the rise in gross regional product (GRDP). West Sumatra’s GRDP for its cities and regencies from 2009-2020experienced growth because many affected it. This study aims to analyze how much factors such as equalization funds, poverty, Regional Original Income, unemployment influenced the GRDP level of regencies/cities in West Sumatra during 2009-2020. For the purpose of this research, multiple linear regression analysis was conducted via the OLS method using time series data for 2009-2020 and cross section data (also known as panel data) from 19 different regencies and cities located within West Sumatra Province. The evaluation was performed using three different models, namely the Common Effect Model (CEM), the Fixed Effect Model (FEM), and the Random Effect Model (REM). The Chow test and the Hausman test were used to determine which model performed the best in the evaluation. The Fixed Effect Model is what the results of the model reveal, and the results show that partially the variables of balanced funds, poverty, local income, and unemployment have a substantial effect on the GRDP of districts and cities in the West Sumatra Province. 78.59% of the variance of the independent variable can be accounted for by the variance of the dependent variable. This value is quite large because it is already above 50%.
Keywords: Economic Growth/Gross Regional Domestic Product, equalization fund, poverty, Regional Original Income, unemployment.
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