Analysis of Factors Attracting Investment in Central Java Province

This study discusses investment in the regencies and cities of Central Java Province. On average, from 2018 to 2024, Central Java ranks fourth out of six provinces on the island of Java in terms of investment inflows. This is an issue that needs to be addressed, considering that investment is a crucial component of economic development. The purpose of this research is to analyze the influence of minimum wage, economic growth, economically active participation rate, human development index, and infrastructure is proxied by road length to invesment in Central Java Province. This study employs a multiple linear regression analysis using panel data and the Ordinary Least Squares (OLS) method. The results indicate that minimum wage, economic growth, and labor force participation rate have a positive and significant effect on investment. In contrast, the human development index and infrastructure do not have a significant effect on investment. The implications of these findings are that regencies and cities with low investment inflows require special attention from the government, such as regulatory transparency and simplified licensing processes to attract more investors. Regarding minimum wage issues, the government should set standards that align with labor market conditions. Economic growth should be promoted due to its positive contribution to investment. Additionally, the potential of the labor force participation rate can benefit regions by making it easier for investors to invest, thereby maximizing employment absorption.