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Examining Factors Affecting Local Economy Growth in Indonesia
  • Nina Nurrahmawati
Nina Nurrahmawati
NYU Center for Urban Science & Progress
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Abstract

Economy plays an important role in regional development, thus the local government expects local economy growth as a measurement of development progress. Exploring factors that determine economy growth can help local officials to prioritize their works. This study aims to explore factors that affecting local economy growth using Indonesia as the case study. The analysis of time series data shows that there is a significant change of local GDP over years eventhough other result shows the GDP trend is stationary. The socioeconomic model also shows that health services, investment in economy, employment and level of urbanization are the significant contributing factors toward GDP. Meanwhile, counting to the government effort, most of the local government expenditure is also significantly contributing toward economy growth.