Purpose This study analyzes the impact of domestic investment (DI), foreign direct investment (FDI), and the moderating effect of population growth (PPG) on the influence of DI and FDI on economic growth. Design/methodology/approach This analysis uses unbalanced panel data from 34 provinces in Indonesia for the period 2011–2024, with a total of 473 province-year observations. The two-step System Generalized Method of Moments (GMM) estimator is applied as the main model, while the one-step System GMM is used as a robustness check to ensure the consistency of the findings. Findings This study found that DI does not have a significant impact on economic growth, whereas FDI has a significant positive impact. In addition, PPG was found to have a significant positive moderating effect on the impact of DI on economic growth and a significant negative moderating effect on the impact of FDI on economic growth. Research limitations/implications This study is limited to examining DI, FDI, and the moderating effect of PPG on the impact of these two types of investment on the economic growth of provinces in Indonesia, thus limiting its implications for strategies aimed at enhancing provincial growth based on these factors. Social implications Findings suggest that population growth in Indonesian provinces has not been accompanied by the necessary qualitative improvements to support high-tech FDI projects. In particular, population expansion has not been matched by increases in the Human Development Index (HDI), which reflects improvements in educational attainment and skills, health conditions, and living standards at the provincial level. This insight holds crucial implications for policymakers, underscoring the need to strengthen human capital development and reduce dependence on foreign expertise. Originality/value This study is one of the first to examine the moderating effect of population growth on the impact of DI and FDI on regional economic growth, particularly in Indonesia.
Setiawan et al. (Thu,) studied this question.