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Unequal Economic Growth Between Regions in Indonesia: Hard Infrastructure or Soft Infrastructure?

Author

Listed:
  • Christian Jeremy Siahaan

    (Development Economics Program, Economic Bachelors, Universitas Katolik Parahyangan, Bandung, Indonesia)

  • Mohammad Kemal Taufiqurahman

    (Development Economics Program, Economic Bachelors, Universitas Katolik Parahyangan, Bandung, Indonesia)

  • Barata Andrianto

    (Development Economics Program, Economic Bachelors, Universitas Katolik Parahyangan, Bandung, Indonesia)

  • Muhammad Nur Iman

    (Development Economics Program, Economic Bachelors, Universitas Katolik Parahyangan, Bandung, Indonesia)

Abstract

Infrastructure is one of the inputs that could affect the growth of a region. The difference in infrastructure development between regions is an obstacle for Indonesia in the rise of economic growth, which will be directly proportional to the increase of inequality between regions. In this study, infrastructure is divided into 2: hard infrastructures, where there are electrification variables, access to water and road access, and soft infrastructure, explained through variables of life expectancy, literacy rates, and school enrolment rates. This study is conducted using the Ordinary Least Square analysis techniques to explain the growth-inequality between regions using the Williamson Index. Principal Component Analysis (PCA) is applied in this study to define hard infrastructure variables and soft infrastructure. The results of this study show that the development of hard infrastructure and soft infrastructure in various regions in Indonesia has reduced the number of inequality in various regions in Indonesia.

Suggested Citation

  • Christian Jeremy Siahaan & Mohammad Kemal Taufiqurahman & Barata Andrianto & Muhammad Nur Iman, 2020. "Unequal Economic Growth Between Regions in Indonesia: Hard Infrastructure or Soft Infrastructure?," International Journal of Business and Administrative Studies, Professor Dr. Bahaudin G. Mujtaba, vol. 6(2), pages 97-110.
    • Handle: RePEc:apa:ijbaas:2020:p:97-110
    DOI: 10.20469/ijbas.6.10004-2
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    References listed on IDEAS

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    2. Rui Huang & Lilyan E. Fulginiti & E. Wesley F. Peterson, 2010. "Health and growth: causality through education," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 2(3), pages 321-344, September.
    3. Biplab Kumar Guru & Inder Sekhar Yadav, 2019. "Financial development and economic growth: panel evidence from BRICS," Journal of Economics, Finance and Administrative Science, Emerald Group Publishing Limited, vol. 24(47), pages 113-126, February.
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