THE EFFECT OF GOVERNMENT EXPENDITURE AND INVESTMENT ON GROSS REGIONAL DOMESTIC PRODUCT AND POVERTY IN EAST KALIMANTAN PROVINCE

Abstract

This study aims to determine the direct and indirect effects of direct expenditure, indirect expenditure, Domestic Direct Investment (PMDN), and Foreign Direct Investment (PMA) on Gross Regional Domestic Product (PDRB) and poverty in East Kalimantan. Path Analysis was used to analyze the data. The data used in this study were secondary data in the form of time series data from 2007 to 2020. The results of the study indicate that the direct effects of direct expenditure, indirect expenditure, PMDN, and PMA on PDRB are positive and not significant. Indirect expenditure and PDRB have a negative and significant impact on poverty. On the other hand, direct expenditure has a positive but not significant effect on poverty. PMDN has a positive and significant effect on poverty. Furthermore, the indirect effects of indirect expenditure and PMA on poverty through PDRB are negative and significant, while the indirect effects of direct expenditure and PMDN on poverty through PDRB are negative and not significant. Simultaneously, direct expenditure, indirect expenditure, PMDN, and PMA variables have a significant impact on PDRB and poverty in East Kalimantan.