Analysis of the Influence of Infrastructure on Economic Growth in South Sumatra Province

Nurul Fadhila Marza; Nasri Bachtiar; Elfindri Elfindri

doi:10.63922/ijebir.v5i04.4551

Nurul Fadhila Marza Program Studi Ekonomi, Fakultas Ekonomi dan Bisnis, Universitas Andalas
Nasri Bachtiar Program Studi Ekonomi, Fakultas Ekonomi dan Bisnis, Universitas Andalas
Elfindri Elfindri Program Studi Ekonomi, Fakultas Ekonomi dan Bisnis, Universitas Andalas

DOI: https://doi.org/10.63922/ijebir.v5i04.4551

Keywords: economic growth, infrastructure, electricity, education, panel data, South Sumatra Province

Abstract

Negotiation This study aims to analyze the effect of economic and social infrastructure on regional economic growth across regencies and municipalities in South Sumatra Province. The independent variables used in this study include electricity access, clean water access, roads in good condition, roads in moderate condition, mobile phone ownership, the number of senior high schools, and the number of hospitals, while Gross Regional Domestic Product (GRDP) is employed as the dependent variable. The study uses panel data from 17 regencies and municipalities in South Sumatra Province covering the period 2018–2024, resulting in 119 observations. Panel data regression is applied as the analytical method. Based on the Chow test and Hausman test, the Fixed Effect Model (FEM) with robust standard errors is selected as the most appropriate model. The results indicate that electricity access and the number of senior high schools have a positive and statistically significant effect on GRDP. In contrast, clean water access, roads in good condition, roads in moderate condition, mobile phone ownership, and the number of hospitals do not show a significant effect on GRDP. Simultaneously, all independent variables jointly have a significant effect on regional economic growth. The R-squared value of 0.4842 indicates that the model explains 48.42 percent of the variation in GRDP, while the remaining 51.58 percent is explained by other factors outside the model. These findings suggest that the development of electricity infrastructure and secondary education plays an important role in promoting regional economic growth in South Sumatra Province.

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