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Abstract

The aim of this research to investigate the effect of government size on regional economic growth in Indonesia. This study uses panel data analysis with using two years of interval data from 2009 until 2015. The results showed that government size has a significant effect on economic growth and it has a non-linear relationship. According the estimation from the model, the threshold government size on regional economic growth is 38.98 percent. Above the threshold, an increase in government size will instead have a negative effect on economic growth.

Bahasa Abstract

Penelitian ini bertujuan untuk meneliti pengaruh government size terhadap pertumbuhan ekonomi daerah di Indonesia. Penelitian ini menggunakan analisis data panel dengan menggunakan data dua tahun interval dari tahun 2009 hingga 2015. Hasil penelitian menunjukkan bahwa government size berpengaruh signifikan terhadap pertumbuhan ekonomi daerah dan berpengaruh secara tidak linier. Berdasarkan hasil model, dapat dihitung bahwa threshold untuk government size terhadap pertumbuhan ekonomi daerah adalah sebesar 38,98%. Jika pertumbuhan ekonomi daerah lebih dari itu, peningkatan government size akan berdampak negatif pada pertumbuhan ekonomi.

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