ANALYSIS OF REAL EARNING INFLUENCE INCOME, GOVERNMENT EXPENDITURES AND INVESTMENT TO ECONOMIC GROWTH IN SOUTH PESISIR DISTRICT

Abstract

By                   : Fyra Mey Firgusty
Adviser I         : Dr. Alvis Rozani, S.E, M.Si
Adviser II       : Drs. Firdaus, SY, M.P

SUMMARY

Economic growth in economic development is very important for a country and a region. Pesisir Selatan District is one of the areas in the development process, which currently continues to carry out development on a planned and gradual basis. The local government is currently faced with many demands, one of which is the demands of the community so that local governments are able to create a prosperous society.

Economic growth is a major indicator in measuring the ability to produce goods and services of an economy, especially in the success of economic development. Economic development is an economic growth followed by changes in the structure and style of economic activity.

This study aims to prove how in the short-term and long-term local revenue, government spending and investment have an influence on economic growth in the South Coastal District. The data used in this research is the time series data for 22 years which started from 1995 until 2016, the data used is obtained from Central Bureau of Statistics and Investment Office of Pesisir Selatan Regency. The method used in this research is Error Correction Model (ECM) .To see the existence of long term relationship used Cointegration Test, while to see the short term relationship used Error Correction Model.

The results of this study indicate that in the short-term variable of local revenue, government expenditure and investment have positive effect on economic growth in Pesisir Selatan Regency. Meanwhile, in the long term, local revenue and investment variables have a positive and significant impact on economic growth in Pesisir Selatan Regency. While government expenditure variable have positive effect, but not significant to economic growth in Pesisir Selatan Regency.

Keywords: Economic Growth, Local Original Income, Government Expenditure, Investment