The Determinants of Sectoral Economic Growth in an Industrial Buffer Zone: A Case Study of Sidoarjo Regency (2010– 2024)

Cindy Nur Hayati; Sishadiyati

doi:10.63922/ijebir.v5i04.4039

Cindy Nur Hayati Development Economics Study Program, UPN Veteran Jawa Timur, Surabaya, Indonesia.
Sishadiyati Development Economics Study Program, UPN Veteran Jawa Timur, Surabaya, Indonesia.

DOI: https://doi.org/10.63922/ijebir.v5i04.4039

Keywords: Economic Growth, Manufacturing Industry, Trade Sector, Production Factors, Sidoarjo Regency

Abstract

Economic growth in Sidoarjo Regency plays a critical role in supporting the economic stability of East Java, given its strategic function as an industrial buffer zone and a primary satellite region. Despite the manufacturing and trade sectors' dominant contributions to the Gross Regional Domestic Product (GRDP), these industries remain vulnerable to global economic shifts, fluctuating investment realization, and challenges in labor absorption efficiency. This research aims to provide a comprehensive empirical evaluation of the factors determining economic growth within these sectors from 2010 to 2024. The study adopts a quantitative approach, utilizing time-series data obtained from the Central Bureau of Statistics (BPS) of Sidoarjo Regency. A Multiple Linear Regression model is applied to assess the influence of production value, investment, and labor on sectoral performance, supported by rigorous classical assumption testing to ensure statistical validity. The findings demonstrate that production value, investment, and labor collectively exert a positive and significant influence on the economic growth of both the manufacturing and trade sectors.The results indicate that production value serves as the primary driver of sectoral output, while investment provides the necessary capital for infrastructural and technological expansion. Although labor absorption remains a vital factor, its impact varies depending on the capital intensity of the respective sector. Ultimately, this research underscores the necessity of a synergized policy framework that aligns industrial capacity with market trade demands to ensure sustainable regional economic resilience.

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