Regional Competitiveness and National Economic Growth

Abstract

Indonesia is a country with a notable economic inequality both across its provinces and districts. This inequality can be attributed to the disparities in access to development. In this paper, the effects of regional competitiveness and economic reforms on economic growth is studied. Regional competitiveness factors include infrastructure pillar, health and education pillar, and labor market efficiency pillar. The data come from the Indonesia Database for Policy and Economic Research (INDO-DAPOER) of the World Bank for the year 2010. The results of the study show that the percentage of households with electricity, the percentage of births attended by skilled health worker, the net enrollment ratio for primary education, the number of people employed, and the total grants statistically and significantly influence regional economic growth positively. Indonesia is to reduce inequality in regional competitiveness and improve the total grants distribution in order to promote regional economic growth equality in the country.