Main Article Content
Abstract
This study aims to analyze the role of Information and Communication Technology (ICT), Foreign Direct Investment (FDI), and the Human Development Index (HDI) in shaping regional output in five provinces on the island of Java. The method used is panel data regression with a random effects approach, where ICT, FDI, and HDI are the independent variables, while Gross Regional Domestic Product (GRDP) is the dependent variable. The results show that all three variables have important and complementary roles in driving GRDP during the 2019–2023 period, but ICT has the most significant influence compared to HDI and FDI. This reflects the high technological advancement in Java and the crucial role of ICT in the region's economic growth. Practically, this study recommends strengthening digital infrastructure, improving the quality of human resources through technological literacy, optimizing FDI based on technology transfer, and accelerating digital transformation in the local economic sector through the development of a regional digital economy blueprint to encourage inclusive and sustainable growth. These findings are expected to enrich the literature and serve as a strategic policy reference for local governments in increasing GRDP in the five provinces on the island of Java.
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References
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- Alfaro, L., Chanda, A., Kalemli-Ozcan, S., & Sayek, S. (2004). FDI and economic growth: The role of local financial markets. Journal of International Economics, 64(1), 89–112.
- Arabi, K. A. M., & Abdalla, S. Z. S. (2013). The impact of human capital on economic growth: Empirical evidence from Sudan. Research in the World Economy, 4(2), 43.
- Bahrini, R., & Qaffas, A. A. (2019). Impact of information and communication technology on economic growth: Evidence from developing countries. Economies, 7(1), 21.
- Balasubramanian, P., Burchi, F., & Malerba, D. (2023). Does economic growth reduce multidimensional poverty? Evidence from low-and middle-income countries. World Development, 161, 106119.
- Barro, R., & Sala Martin, X. (2004). Economic Growth and ed.
- Bénétrix, A., Pallan, H. M., & Panizza, U. (2023). The elusive link between FDI and economic growth.
- Bloom, D. E., Khoury, A., Kufenko, V., & Prettner, K. (n.d.). Spurring economic growth through human development.
- Borensztein, E., De Gregorio, J., & Lee, J.-W. (1998). How does foreign direct investment affect economic growth? Journal of International Economics, 45(1), 115–135.
- Brynjolfsson, E., & Hitt, L. M. (1998). Beyond the productivity paradox. Communications of the ACM, 41(8), 49–55.
- Badan Pusat Statistik (2023), available on https://www.bps.go.id/id.
- Cao, Y., & Chen, H. (2021). Foreign Direct Investment, Total Factor Productivity, and Export Product Quality Upgrading—A Study Based on Chinese Firm-Level Microdata. Macroeconomic., 07, 54–65.
- Ciobanu, A. M. (2021). The impact of FDI on economic growth in case of Romania. International Journal of Economics and Finance, 12(12), 1–81.
- Comin, D., & Hobijn, B. (2010). An exploration of technology diffusion. American Economic Review, 100(5), 2031–2059.
- Corporations, T. (2007). World Investment Report.
- Garza-Rodriguez, J., Almeida-Velasco, N., Gonzalez-Morales, S., & Leal-Ornelas, A. P. (2020). The impact of human capital on economic growth: The case of Mexico. Journal of the Knowledge Economy, 11, 660–675.
- Hoa, P. T., & Phuoc, N. K. (2016). Human development index impact on economic growth. Ho Chi Minh City Open University Journal of Science-Economics and Business Administration, 6(1), 3–13.
- Irtyshcheva, I., Stehnei, M., Popadynets, N., Bogatyrev, K., Boiko, Y., Kramarenko, I., Senkevich, O., Hryshyna, N., Kozak, I., & Ishchenko, O. (2021). The effect of digital technology development on economic growth.
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- Kouadio, H. K., & Gakpa, L.-L. (2022). Do economic growth and institutional quality reduce poverty and inequality in West Africa? Journal of Policy Modeling, 44(1), 41–63.
- Maulana, F. A., & Susilowati, D. (2020). Analisis Pengaruh Dana Alokasi Umum (Dau), Pajak Daerah, Dan Jumlah Penduduk Terhadap Pertumbuhan Ekonomi di Provinsi Nusa Tenggara Barat Tahun 2011-2017. Jurnal Ilmu Ekonomi, 4(1), 130–139.
- Mogess, Y. K., Eshete, Z. S., & Alemaw, A. T. (2023). Economic growth and poverty reduction: Evidence from Sub‐Saharan African (SSA) countries. Poverty & Public Policy, 15(2), 251–278.
- Mwakabungu, B. H. P., & Kauangal, J. (2023). An empirical analysis of the relationship between FDI and economic growth in Tanzania. Cogent Economics & Finance, 11(1), 2204606.
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- Nurlaili, A. W., & Sugiharti, L. (2023). Peran Modal Manusia Terhadap Pertumbuhan Ekonomi Indonesia. Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi (MEA), 7(3), 416–428.
- Rahman, R. A., Raja, M. A., & Ryan, C. (2020). The impact of human development on economic growth: A panel data approach. Available at SSRN 3526909.
- Rivera, M. A. (2017). The synergies between human development, economic growth, and tourism within a developing country: An empirical model for Ecuador. Journal of Destination Marketing & Management, 6(3), 221–232.
- Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5, Part 2), S71–S102.
- Sabir, S., Rafique, A., & Abbas, K. (2019). Institutions and FDI: evidence from developed and developing countries. Financial Innovation, 5(1), 1–20.
- Sari, V. K., & Prastyani, D. (2021). The impact of the institution on economic growth: An evidence from ASEAN. Jurnal Ekonomi Pembangunan, 19(1), 17–26.
- Sarwar, A., Khan, M. A., Sarwar, Z., & Khan, W. (2021). Financial development, human capital and its impact on economic growth of emerging countries. Asian Journal of Economics and Banking, 5(1), 86–100.
- Shahzad, U., & Xiaoyin, H. (2023). How does Digitalization impact the Economic growth: Evidence from China and the USA? Journal of Global Trade, Ethics and Law, 1(2), 25–42.
- Solow, R. M. (1957). Technical change and the aggregate production function. The Review of Economics and Statistics, 39(3), 312–320.
- Sultana, T., Dey, S. R., & Tareque, M. (2022). Exploring the linkage between human capital and economic growth: A look at 141 developing and developed countries. Economic Systems, 46(3), 101017.
- Sutono, S., Harsono, I., Nasruddin, N., & Judijanto, L. (2023). The Influence of Regulatory Policy, Technology Infrastructure, and Human Resource Quality on Economic Growth in Surabaya City. West Science Journal Economic and Entrepreneurship, 1(11), 547–556.
- Taqi, M., e Ali, M. S., Parveen, S., Babar, M., & Khan, I. M. (2021). An analysis of Human Development Index and Economic Growth. A Case Study of Pakistan. iRASD Journal of Economics, 3(3), 261–271.
- Toader, E., Firtescu, B. N., Roman, A., & Anton, S. G. (2018). Impact of information and communication technology infrastructure on economic growth: An empirical assessment for the EU countries. Sustainability, 10(10), 3750.
- Todaro, M. P., & Smith, S. C. (2020). Economic development. Pearson UK.
- Widarjono, A. (2013). Ekonometrika pengantar dan aplikasinya. Yogyakarta: Upp Stim Ykpn.
- Widarni, E. L., & Bawono, S. (2021). Human capital, technology, and economic growth: A case study of Indonesia. The Journal of Asian Finance, Economics and Business, 8(5), 29–35.
- Wu, H., Atamanov, A., Bundervoet, T., & Paci, P. (2024). Is economic growth less welfare enhancing in Africa? Evidence from the last forty years. World Development, 184, 106759.
- Yimer, A. (2023). The effects of FDI on economic growth in Africa. The Journal of International Trade & Economic Development, 32(1), 2–36.
- Yousefi, A. (2011). The impact of information and communication technology on economic growth: Evidence from developed and developing countries. Economics of Innovation and New Technology, 20(6), 581–596.
References
Acemoglu, D., & Restrepo, P. (2018). Artificial intelligence, automation, and work. In The economics of artificial intelligence: An agenda (pp. 197–236). University of Chicago Press.
Alfaro, L., Chanda, A., Kalemli-Ozcan, S., & Sayek, S. (2004). FDI and economic growth: The role of local financial markets. Journal of International Economics, 64(1), 89–112.
Arabi, K. A. M., & Abdalla, S. Z. S. (2013). The impact of human capital on economic growth: Empirical evidence from Sudan. Research in the World Economy, 4(2), 43.
Bahrini, R., & Qaffas, A. A. (2019). Impact of information and communication technology on economic growth: Evidence from developing countries. Economies, 7(1), 21.
Balasubramanian, P., Burchi, F., & Malerba, D. (2023). Does economic growth reduce multidimensional poverty? Evidence from low-and middle-income countries. World Development, 161, 106119.
Barro, R., & Sala Martin, X. (2004). Economic Growth and ed.
Bénétrix, A., Pallan, H. M., & Panizza, U. (2023). The elusive link between FDI and economic growth.
Bloom, D. E., Khoury, A., Kufenko, V., & Prettner, K. (n.d.). Spurring economic growth through human development.
Borensztein, E., De Gregorio, J., & Lee, J.-W. (1998). How does foreign direct investment affect economic growth? Journal of International Economics, 45(1), 115–135.
Brynjolfsson, E., & Hitt, L. M. (1998). Beyond the productivity paradox. Communications of the ACM, 41(8), 49–55.
Badan Pusat Statistik (2023), available on https://www.bps.go.id/id.
Cao, Y., & Chen, H. (2021). Foreign Direct Investment, Total Factor Productivity, and Export Product Quality Upgrading—A Study Based on Chinese Firm-Level Microdata. Macroeconomic., 07, 54–65.
Ciobanu, A. M. (2021). The impact of FDI on economic growth in case of Romania. International Journal of Economics and Finance, 12(12), 1–81.
Comin, D., & Hobijn, B. (2010). An exploration of technology diffusion. American Economic Review, 100(5), 2031–2059.
Corporations, T. (2007). World Investment Report.
Garza-Rodriguez, J., Almeida-Velasco, N., Gonzalez-Morales, S., & Leal-Ornelas, A. P. (2020). The impact of human capital on economic growth: The case of Mexico. Journal of the Knowledge Economy, 11, 660–675.
Hoa, P. T., & Phuoc, N. K. (2016). Human development index impact on economic growth. Ho Chi Minh City Open University Journal of Science-Economics and Business Administration, 6(1), 3–13.
Irtyshcheva, I., Stehnei, M., Popadynets, N., Bogatyrev, K., Boiko, Y., Kramarenko, I., Senkevich, O., Hryshyna, N., Kozak, I., & Ishchenko, O. (2021). The effect of digital technology development on economic growth.
Kamaly, A. (2014). Does FDI crowd in or out domestic investment? New evidence from emerging economies. Modern Economy, 2014.
Kouadio, H. K., & Gakpa, L.-L. (2022). Do economic growth and institutional quality reduce poverty and inequality in West Africa? Journal of Policy Modeling, 44(1), 41–63.
Maulana, F. A., & Susilowati, D. (2020). Analisis Pengaruh Dana Alokasi Umum (Dau), Pajak Daerah, Dan Jumlah Penduduk Terhadap Pertumbuhan Ekonomi di Provinsi Nusa Tenggara Barat Tahun 2011-2017. Jurnal Ilmu Ekonomi, 4(1), 130–139.
Mogess, Y. K., Eshete, Z. S., & Alemaw, A. T. (2023). Economic growth and poverty reduction: Evidence from Sub‐Saharan African (SSA) countries. Poverty & Public Policy, 15(2), 251–278.
Mwakabungu, B. H. P., & Kauangal, J. (2023). An empirical analysis of the relationship between FDI and economic growth in Tanzania. Cogent Economics & Finance, 11(1), 2204606.
Nababan, T. S., Panjaitan, R., Panjaitan, F., & Napitupulu, S. (2024). Investigating The Relationship Between Economic Growth and Human Development Index: Are They Simultaneously Related? Sultanist: Jurnal Manajemen Dan Keuangan, 12(2), 319–330.
Ngubane, M. Z., Mndebele, S., & Kaseeram, I. (2023). Economic growth, unemployment and poverty: Linear and non-linear evidence from South Africa. Heliyon, 9(10).
Nurlaili, A. W., & Sugiharti, L. (2023). Peran Modal Manusia Terhadap Pertumbuhan Ekonomi Indonesia. Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi (MEA), 7(3), 416–428.
Rahman, R. A., Raja, M. A., & Ryan, C. (2020). The impact of human development on economic growth: A panel data approach. Available at SSRN 3526909.
Rivera, M. A. (2017). The synergies between human development, economic growth, and tourism within a developing country: An empirical model for Ecuador. Journal of Destination Marketing & Management, 6(3), 221–232.
Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5, Part 2), S71–S102.
Sabir, S., Rafique, A., & Abbas, K. (2019). Institutions and FDI: evidence from developed and developing countries. Financial Innovation, 5(1), 1–20.
Sari, V. K., & Prastyani, D. (2021). The impact of the institution on economic growth: An evidence from ASEAN. Jurnal Ekonomi Pembangunan, 19(1), 17–26.
Sarwar, A., Khan, M. A., Sarwar, Z., & Khan, W. (2021). Financial development, human capital and its impact on economic growth of emerging countries. Asian Journal of Economics and Banking, 5(1), 86–100.
Shahzad, U., & Xiaoyin, H. (2023). How does Digitalization impact the Economic growth: Evidence from China and the USA? Journal of Global Trade, Ethics and Law, 1(2), 25–42.
Solow, R. M. (1957). Technical change and the aggregate production function. The Review of Economics and Statistics, 39(3), 312–320.
Sultana, T., Dey, S. R., & Tareque, M. (2022). Exploring the linkage between human capital and economic growth: A look at 141 developing and developed countries. Economic Systems, 46(3), 101017.
Sutono, S., Harsono, I., Nasruddin, N., & Judijanto, L. (2023). The Influence of Regulatory Policy, Technology Infrastructure, and Human Resource Quality on Economic Growth in Surabaya City. West Science Journal Economic and Entrepreneurship, 1(11), 547–556.
Taqi, M., e Ali, M. S., Parveen, S., Babar, M., & Khan, I. M. (2021). An analysis of Human Development Index and Economic Growth. A Case Study of Pakistan. iRASD Journal of Economics, 3(3), 261–271.
Toader, E., Firtescu, B. N., Roman, A., & Anton, S. G. (2018). Impact of information and communication technology infrastructure on economic growth: An empirical assessment for the EU countries. Sustainability, 10(10), 3750.
Todaro, M. P., & Smith, S. C. (2020). Economic development. Pearson UK.
Widarjono, A. (2013). Ekonometrika pengantar dan aplikasinya. Yogyakarta: Upp Stim Ykpn.
Widarni, E. L., & Bawono, S. (2021). Human capital, technology, and economic growth: A case study of Indonesia. The Journal of Asian Finance, Economics and Business, 8(5), 29–35.
Wu, H., Atamanov, A., Bundervoet, T., & Paci, P. (2024). Is economic growth less welfare enhancing in Africa? Evidence from the last forty years. World Development, 184, 106759.
Yimer, A. (2023). The effects of FDI on economic growth in Africa. The Journal of International Trade & Economic Development, 32(1), 2–36.
Yousefi, A. (2011). The impact of information and communication technology on economic growth: Evidence from developed and developing countries. Economics of Innovation and New Technology, 20(6), 581–596.