Investment Efficiency Analysis in Tangerang Regency Using the Incremental Capital Output Ratio (ICOR)

Abstract

This study explores investment efficiency in Tangerang Regency through the lens of the Incremental Capital Output Ratio (ICOR). ICOR acts as a key indicator to assess how effectively additional investments contribute to economic growth in the region. As a vital industrial and economic center in Banten Province, Tangerang Regency has seen rapid industrial development and improvements in infrastructure. However, it is essential to evaluate investment efficiency to ensure that these investments positively impact economic growth. The research employs a descriptive quantitative approach, utilizing secondary data from the Central Bureau of Statistics (BPS), regional financial reports, and other official sources. The findings reveal that ICOR values in Tangerang Regency have experienced fluctuations over the past few years. Prior to the COVID-19 pandemic, the ICOR value hovered around 4, indicating relatively efficient investment. However, in 2020, the pandemic's effects resulted in a negative ICOR of -6.04, highlighting ineffective investment in generating additional output. In the post-pandemic period, the ICOR rose to above 5, signaling a need for investment optimization to improve efficiency