DECENTRALIZATION'S IMPACT ON ECONOMIC GROWTH: A COMPARATIVE ANALYSIS
DOI:
https://doi.org/10.36690/2674-5208-2023-4-4-19Keywords:
economic growth, decentralization, foreign investment, tax revenueAbstract
This research aims to examine the effect of decentralization, tax revenues as a percentage of GDP, and foreign investment on economic growth using multiple linear regression analysis. The introduction provides a contextual understanding of the importance of understanding the factors that influence economic growth amidst policy changes from pre-decentralization to post-decentralization. Time series data for 49 years (1977-2021) was used for analysis. The independent variables decentralization, tax revenue as a percentage of GDP, and foreign investment were subjected to multiple linear regression on the dependent variable, namely economic growth. Statistical analysis includes evaluation of coefficients, p values, F statistics, and R-squared. The findings show that decentralization and foreign investment have a significant impact on economic growth. However, tax revenues as a percentage of GDP do not show a significant effect on economic growth. This study underscores the important role of decentralization policies and foreign investment in shaping economic growth. This emphasizes the need to formulate economic policy strategies that take these factors into account. However, further research is needed on tax revenues as a percentage of GDP within the scope of this analysis.
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