DETERMINANTS OF ECONOMIC GROWTH IN TEN PROVINCES OF SUMATERA ISLAND

Khairil Ghifari, NIM.: 22108010072 (2026) DETERMINANTS OF ECONOMIC GROWTH IN TEN PROVINCES OF SUMATERA ISLAND. Skripsi thesis, UIN SUNAN KALIJAGA YOGYAKARTA.

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Abstract

This study analyzes the determinants of economic growth in ten provinces on Sumatera Island using panel data from 2012 to 2024. Economic growth is measured by Gross Regional Domestic Product (GRDP), while domestic investment (PMDN), Human Development Index (HDI), and Information and Communication Technology Development Index (IP-TIK) are employed as explanatory variables. The empirical model is estimated using a Fixed Effect Model (FEM) with Seemingly Unrelated Regression (SUR) to address cross-sectional correlation and improve estimation efficiency. The results indicate that domestic investment and human development have a positive and statistically significant effect on economic growth, confirming the theoretical predictions of endogenous growth theory that emphasize the role of capital accumulation and human capital in fostering long term growth. In contrast, the ICT development index exhibits a negative and significant effect, suggesting that digital development in Sumatera has not yet been fully transformed into productive economic activities and may still be dominated by consumption based usage. These findings imply that policies aimed at strengthening investment quality, improving human capital, and directing ICT utilization toward productive sectors are essential to promote sustainable regional economic growth in Sumatera Island. Keywords: Economic Growth, Domestic Investment, Human Development Index, ICT Development Index

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