Analysing the Structural Relationship between Labor Productivity and Investments in Indonesia: An Application of Two Stage Least Square
| Main Authors: | Linda Sari, Raina, Hasyim, Sirojuzilam, Afiffudin, Syaad, Ruslan, Dede |
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| Format: | Article PeerReviewed Book |
| Bahasa: | ind |
| Terbitan: |
Primrose Hall Publishing Group
, 2020
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| Subjects: | |
| Online Access: |
http://digilib.unimed.ac.id/52069/1/Turnitin.pdf http://digilib.unimed.ac.id/52069/ |
Daftar Isi:
- Investments play an important role in driving an economy to produce goods and services and also create jobs. For those, to attract the investors, we need to improve the quality of human resources measured through labour productivity especially in Indonesia. In line with the issue, Indonesia as a country that has many labour forces reported low productivity compared with Singapore, Malaysia and Indonesia. Thus, this study aims to analyse the relationship between labour productivity with investment and regional economic growth in Indonesia. This quantitative study designed using the simultaneous equation model. The data analysed by utilising the Two-Stage Least Square Approach. A total of three simultaneous equation models were proposed and the data consist of 33 provinces and six-year starting 2013 to 2018 that collected from the central bureau of Statistic. The results of this study found that investment has significant in increasing labour productivity, and it is boosting investments. Next, an increase in human development index, provincial minimum wage and investments are significant in increasing labour productivity, while increasing the significant health complaints in decreasing workforce productivity. Also, an increase in labour productivity and human development index is significant in increasing investments while the increasing provincial minimum wage significantly in decreasing the investment. Lastly, labour productivity has been positive and significant against gross regional domestic product per capita. Foreign direct investment and domestic capital investment does not significantly affect Gross Regional Domestic Product per capita. In conclusions, the investment, human development index, provincial minimum wage have positively significant affecting labour productivity and its effect on gross regional domestic product. In contrast, investments (foreign direct and domestic capital) do not have a relationship with gross regional domestic product.