Corruption and Economic Growth at Province Levels in Indonesia

Nairobi Nairobi(1),

DOI: https://doi.org/10.15294/jejak.v14i2.25996


(1) Faculty of Economics and Business, University of Lampung

Abstract

This study aims to determine the effect of corruption on economic growth at the provincial level in Indonesia. This study uses a model based on the economic growth model of Levine and Renelt (1992). This study uses secondary data obtained from the Central Statistics Agency (BPS), the Investment Coordinating Board (BKPM), and Transparency International Indonesia with the research period of 2014-2018. This study uses a panel data model with a cross-section of 16 (sixteen) provinces in Indonesia. This study uses a model with a Random Effect Model (REM) approach. The results showed that the corruption perception index, foreign direct investment (FDI), initial growth (EGt-1), government spending (GE) and labor (L) each had a positive and significant effect on economic growth (EG) in 16 provinces in Indonesia for the 2014-2018 period, ceteris paribus.

Keywords

Corruption Perception Index, Foreign Direct Investment, Initial Growth, Government Expenditure, Labor, and Random Effect Model

Full Text:

PDF

References

Aidt, T., Dutta, J., & Sena, V. (2008). Governance regimes, corruption and growth: Theory and evidence. Journal of Comparative Economics, 36(2), 195–220. https://doi.org/10.1016/j.jce.2007.11.004

Akman, B., & A.H Sapha, D. (2018). Pengaruh Korupsi Terhadap Pertumbuhan Ekonomi di Indonesia. Journal Ilmiah Mahasiswa, 3(4), 531–538.

Alatas, V., Cameron, L., Chaudhuri, A., Erkal, N., & Gangadharan, L. (2009). Subject pool effects in a corruption experiment : A comparison of Indonesian public servants and Indonesian students. 113–132. https://doi.org/10.1007/s10683-008-9207-3

Asogu, S. A. (2012). Fighting corruption in Africa: do existing corruption-control levels matter? African Governance and Development Institute Working Paper, WP/12/012, 1–27.

Baltagi, B. H. (2005). Econometric Analysis of Panel Data. In John Wiley & Sons Ltd (3th ed., Vol. 5, Issue 7). John Wiley & Sons Ltd. https://doi.org/10.3109/00498257509056115

d’Agostino, G., Dunne, J. P., & Pieroni, L. (2016). Corruption and growth in Africa. European Journal of Political Economy, 43, 71–88. https://doi.org/10.1016/j.ejpoleco.2016.03.002

Dana, B. S., Supriyanti, E., Jember, U., Jember, U., & Jember, U. (2017). Economic Growth and Corruption in Indonesia: A Good Governance Approach. Proceedings of the National Seminar and Call For Paper on Economics and Business, 244–248.

Hakimi, A., Hamdi, H., & Rate, N. I. (2017). Does Corruption Limit FDI and Economic Growth ? Evidence from MENA International Journal of Emerging Markets Article information : International Journal of Emerging Markets, June. https://doi.org/10.1108/IJoEM-06-2015-0118

Hariyani, H. F., Priyarsono, D. S., & Asmara, A. (2016). Analysis of Factors Influencing Corruption in Asia Pacific [Analisis Faktor-faktor yang Memengaruhi Korupsi di Kawasan Asia Pasifik]. Jurnal Ekonomi dan Kebijakan Pembangunan, 5(2), 32-44.

Huang, C. J. (2016). Is corruption bad for economic growth? Evidence from Asia-Pacific countries. North American Journal of Economics and Finance, 35(100), 247–256. https://doi.org/10.1016/j.najef.2015.10.013

Kuncoro, A. (2002). Corruption and Economic Growth in Indonesia. Ekonomi Dan Keuangan Indonesia, XLX(1), 79–114. https://doi.org/10.15291/oec.206

Levine, R., & Renelt, D. (1992). A Sensitivity Analysis of Cross-Country Growth Regressions. American Economic Review, 82(4), 942–963. https://doi.org/10.2307/2117352

Neeman, Z., Paserman, M. D., & Simhon, A. (2008). Corruption and openness. B.E. Journal of Economic Analysis and Policy, 8(1). https://doi.org/10.2202/1935-1682.2013

Nilsson, M. (2017). The Effect of Corruption on Economic Growth. May.

Podobnik, B., Shao, J., & Stanley, H. E. (2008). Influence of Corruption on Economic Growth Rate and Foreign Investment. May 2014. https://doi.org/10.1140/epjb/e2008-00210-2

Sequeira, S. (2012). Advances in measuring corruption in the field. In Research in Experimental Economics (Vol. 15, Issue 1). Emerald Group Publishing Ltd. https://doi.org/10.1108/S0193-2306(2012)0000015008

Sucesco, T. (2012). Corruption Pattern In Indonesia : A Geographical Analysis. Journal of Economics and Policy (JEJAK), 5(45), 159–166. https://doi.org/10.15294/jejak.v7i1.3596

Refbacks

  • There are currently no refbacks.


Bookmark and Share


Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.