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September 10, 2025

Special Economic Zones and Local Economic Development: An Indonesia Perspective

Key Points

Economic growth in SEZs is significantly influenced by regional original revenue in both short and long terms.
Road infrastructure, labor force participation rate, and human development index show long-term effects on economic growth.
Investment is pivotal for overall development in SEZ regions, although short-term impacts are limited.
Emphasizing long-term strategies and PAD optimization is crucial for sustained economic growth.

Abstract

This study aims to analyze the determinants of economic growth in regencies/municipalities that host Special Economic Zones (SEZs) in Indonesia, using data from 14 SEZs spread across various regions. The variables analyzed include road infrastructure, investment, Regional Original Revenue (PAD), Labor Force Participation Rate (LFPR), and Human Development Index (HDI). The results show that road infrastructure, investment, LFPR, and HDI do not have a significant effect on economic growth in the short term, but have a significant effect in the long term. Meanwhile, PAD has a positive and significant effect on economic growth in both the short and long term. These findings highlight the importance of long-term development and PAD optimization in driving economic growth in SEZ regions.

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Cite This Study

Anggraini et al. (Sat,) studied this question.

synapsesocial.com/papers/68c1b36054b1d3bfb60ea4d6 https://doi.org/https://doi.org/10.9734/ajeba/2025/v25i71889

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