The Influence of Economic Factors on Economic Growth in the Province of Sumatera Island

Abstract

Economic Growth reflects the abilty of a country or region to improve the standard of living of its citizens through increased output of goods and services Based on existing theories and several studies that have been conducted, economic growth, especially in the province of Sumatra Island, is generally related to several factors such as plantations, investment, and inflation. This study aims to test and analyze the effect of plantations, investment, and inflation on economic growth in the province of Sumatra Island in 2014-2023. The type of research used in this research is descriptive quantitative while the data source used in this research is secondary data from the Central Statistics Agency (BPS). The object of this research is the province on the island of Sumatra. This study uses panel data with a cross section of 10 Sumatra island provinces and a 10-year time series, starting from  2014 to 2023. The analysis method used is panel data regression. The results of this study indicate that the best model is the Fixed Effect. Based on the regression results, it is known that partially the independent plantation variable and the investment variable have a positive and significant effect on economic growth. While the inflation variable has a positive and insignificant effect on economic growth. Similarly, the independent variables of plantations, investment, and inflation have a significant influence on economic growth in the province of Sumatra Island with a Prob (F-static) value of 0.00000 <0.05.