Analysis of the Effect of Capital Expenditure, Regional Investment, Labor Absorption, and Economic Growth on Poverty

Riska Novitasari; Susilo

doi:10.21776/jdess.2025.04.1.17

Authors

Riska Novitasari Ekonomi Pembangunan, Faculty of Economics and Business, Universitas Brawijaya, Indonesia
Susilo Economic Development, Faculty of Economics and Business, Universitas Brawijaya, Indonesia

DOI:

https://doi.org/10.21776/jdess.2025.04.1.17

Keywords:

Poverty, Capital Expenditure, Regional Investment, Labor Absorption, Economic Growth

Abstract

The reduction in poverty and the high gap between the target and the actual poverty percentage are followed by an increase in capital expenditure, a drastic increase in regional investment in 2022 will not reduce poverty drastically, labor absorption will increase drastically by 3.1%, and economic growth is ranked 3rd. throughout the island of Java. So this research aims to determine the influence of Capital Expenditures, Regional Investment, Labor Absorption, and Economic Growth on Poverty in Central Java Province in 2017-2022. The samples used in this research were 35 regencies/cities in the province of Central Java in the period 2017 to 2022. Data analysis used in this research was multiple linear regression using the T-Test, F Test, and Coefficient of Determination (R2) . The research results show that capital expenditure has a significant positive effect on poverty, regional investment has an insignificant negative effect on poverty, labor absorption has an insignificant negative effect on poverty, and economic growth has a significant negative effect on poverty.

References

Alisha, WP and Yulhendri, Y. (2021) 'The Effect of Economic Growth on Poverty Levels in Districts/Cities of West Sumatra', Jurnal Ecogen, 4(4), p. 581. Available at: https://doi.org/10.24036/jmpe.v4i4.12455.

Aqidah, S. and Aisyah, S. (2022) Analysis of the Effect of Investment and Capital Expenditure on Poverty in South Sulawesi Province with Economic Growth as an Intervening Variable, ICOR: Journal of Regional Economics. XX.

Chusna, A. (2013) 'The Influence of Industrial Sector Growth Rate, Investment, and Wages on Industrial Sector Labor Absorption in Central Java Province 1980-2011', Economics Development Analysis Journal, 2(3), pp. 14–23.

Demak, SNK, Masinambow, VAJ and Londa, AT (2020) 'The Effect of Education Spending, Health Spending, Capital Spending and Inflation on Poverty in Manado City', Jurnal Berkala Ilmiah Efisiensi, 20(1), pp. 145–155. Available at: https://ejournal.unsrat.ac.id/v3/index.php/jbie/article/view/28171/27622.

Fitri, LM and Aimon, H. (2019) 'Analysis of Determinants of Economic Growth and Poverty in West Sumatra', Journal of Economic and Development Studies, 1(3), p. 769. Available at: https://doi.org/10.24036/jkep.v1i3.7704.

Kuncoro, M. (1997) Development economics: theory, problems, and policies. Publishing and Printing Unit, YKPN Academy of Corporate Management. Available at: https://cir.nii.ac.jp/crid/1130282271741265280.bib?lang=ja (Accessed: 27 November 2023).

Munir, B. (2002) Regional development planning in the perspective of regional autonomy. BAPPEDA NTB Province. Available at: https://books.google.co.id/books?id=7OS8AAAACAAJ.

N. Gregory Mankiw (2018) 'Principles of Microeconomics (Fourth Edition)', International Journal of Advanced Research, 6(3), pp. 731–739. Available at: https://doi.org/10.21474/ijar01/6726.

Nadra, IM (2022) Review of the Ineffectiveness of State Expenditure Implementation Before and During the COVID01 Pandemic at KPPN Pematang Siantar, Thesis.

Nurlayli, S. and Jumarni, J. (2022) 'The Influence of Islamic Human Development Index (I-HDI) and Labor Absorption on Poverty Levels in Bone Regency, South Sulawesi Province 2011-2020', AL-IQTISHAD: Journal of Economics, 14(2), pp. 114–130. Available at: https://doi.org/10.30863/aliqtishad.v14i2.3089.

Pangiuk, A. (2018) 'The Effect of Economic Growth on Poverty Reduction in Jambi Province 2009-2013', ILTIZAM Journal of Sharia Economic Research, 2(2), p. 44. Available at: https://doi.org/10.30631/iltizam.v2i2.160.

Pasaribu, R., Batubara, M. and Rahmani, NAB (2022) 'The Effect of Labor, Investment and Economic Growth on Poverty Levels in Padang Lawas Regency', Journal of Accounting and Taxation, 22(22), pp. 1–13.

Rosenstein-Rodan, PN (1943) 'Problems of Industrialization of Eastern and South-Eastern Europe', The Economic Journal, 53(210/211), pp. 202–211. Available at: https://doi.org/10.2307/2226317.

Safitri, H. and Saleh, M. (2020) The Effect of Capital Expenditure, Non-Capital Expenditure, Foreign Investment, and Domestic Investment on Poverty in South Kalimantan, JIEP: Journal of Economics and Development. Available at: https://doi.org/10.20527/jiep.v3i1.2220.

Sirait, HPB (2023) 'Analysis of the Influence of Capital Expenditure, Human Development Index and Inflation on Economic Growth and Poverty in the Kalimantan Region', Journal of Master of Economics, 9(1), pp. 39–54.

Sugiyono, D. (2013) Quantitative, Qualitative, and Action Research Methods.

Suharlina, H. (2020) 'The Effect of Investment, Unemployment, Education and Economic Growth on Poverty and Its Relationship with Community Welfare in Districts/Cities in West Kalimantan Province', Proceedings of the Annual Academic Seminar on Economics and Development Studies 2020, pp. 56–72.

Sukarnoto, T. (2020) 'Trickle Down Economic, Sharia Bank Product Attributes and Going Concern of Micro, Small and Medium Enterprises', Ecobankers: Journal of Economy and Banking, 1(2), p. 1. Available at: https://doi.org/10.47453/ecobankers.v1i2.144.

Syawaluddin (no date) 'Syawaluddin, 2015'.

Todaro, MP and Smith, SC (2006) Economic development-Todaro.

'Law Number 45 of 2007' (Accessed March 15, 2024).

Law of the Republic of Indonesia No. 25 of 2007 (Accessed March 15, 2024).

Yustitia, E., Thoriq, AM and Ardiansyah, H. (2022) 'The Effect of Labor Absorption on Poverty Levels in Purwakarta Regency for the Period 2011 – 2020', Jurnal Maps (Islamic Banking Management), 6(1), pp. 43–52. Available at: https://doi.org/10.32627/maps.v6i1.574.