The Relationship between Regional Economic Growth and Monetary Policy on Domestic Investment in Makassar City
DOI:
https://doi.org/10.55657/jpmb.v4i02.256Keywords:
Interest rate, domestic investment, regional economic growth, Makassar CityAbstract
This study examines the influence of Gross Regional Domestic Product (GRDP) and interest rates on domestic investment in Makassar City. The research aims to provide empirical evidence on key macroeconomic determinants of regional investment, highlighting Makassar as a growing economic hub in Eastern Indonesia. Using annual time series data from 2001-2023 obtained from the Central Bureau of Statistics (BPS), Bank Indonesia, and the Makassar Investment and One Stop Integrated Services Office, multiple linear regression was applied after ensuring model validity through classical assumption tests. The results show that GRDP has a positive and significant effect on domestic investment, while interest rates have a negative and significant effect. Both variables together explain 73.5% of the variation in investment levels. These findings align with classical, Keynesian, and endogenous growth theories, confirming that economic expansion and lower interest rates encourage investment. The study contributes to the understanding of regional investment behavior and suggests that maintaining macroeconomic stability and pro-growth policies are crucial for strengthening domestic investment in emerging Indonesian cities like Makassar.
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