Analysis of the Impact of Infrastructure Development on Inclusive Economic Growth in Indonesia

Desma Yulia; Alpon Satrianto

doi:10.63922/ijebir.v5i05.6489

Desma Yulia Universitas Negeri Padang
Alpon Satrianto Universitas Negeri Padang

DOI: https://doi.org/10.63922/ijebir.v5i05.6489

Keywords: Inclusive Economic Growth; Infrastructure Development; Inclusive Growth Index; Panel Data; Indonesia.

Abstract

Infrastructure development is an important factor in supporting inclusive economic growth because it can improve people's access to economic activities and basic public services. This study aims to analyze the effect of infrastructure development on inclusive economic growth in Indonesia. Infrastructure development is represented by provincial road length, sanitation access, electricity access, clean water access, and internet access, while inclusive economic growth is measured using the Inclusive Growth Index (IGI). This study uses panel data from 34 provinces in Indonesia during the 2016–2024 period. The data were analyzed using panel data regression with the Random Effect Model (REM), which was selected based on the Chow and Hausman tests using EViews 12. The results show that provincial road length has a significant negative effect on inclusive economic growth. Sanitation access has a positive but insignificant effect, while electricity access has a significant negative effect. Clean water access has a negative but insignificant effect. Meanwhile, internet access has a positive and significant effect on inclusive economic growth. Simultaneously, all infrastructure variables have a significant effect on inclusive economic growth in Indonesia. These findings indicate that infrastructure development does not always have a positive impact on inclusive economic growth. Therefore, infrastructure development needs to be improved through better distribution and utilization so that its benefits can be more widely enjoyed by the community and support more inclusive economic growth.

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