Email this article INVESTMENT AND EXPORT EFFECT ON POVERTY THROUGH GROWTH: EVIDENCE FROM INDONESIA’S NICKEL PRODUCING PROVINCES
Abstract
Indonesia holds the largest nickel reserves in the world, and investment and exports in the nickel-based metal industry have increased rapidly in the main nickel-producing provinces. This study examines the direct effects of investment and exports on economic growth and poverty, as well as their indirect effects on poverty through economic growth, in four nickel-producing provinces, namely North Maluku, Southeast Sulawesi, South Sulawesi, and Central Sulawesi. This quantitative study uses provincial panel data for 2013–2024 obtained from the Central Statistics Agency, the Investment Coordinating Board, and the Ministry of Trade. Economic growth is measured by the real gross regional domestic product of the metal mining and industry sector. The data are analyzed using path analysis with a fixed effect panel model, and the indirect effects are tested using the Sobel test. The results show that investment and exports have a positive and significant effect on economic growth. Investment has a negative and significant effect on poverty, whereas exports and economic growth have no significant effect on poverty. Neither investment nor exports has a significant indirect effect on poverty through economic growth. These findings indicate that the growth of the metal mining and industry sector in the four provinces has not yet translated into poverty reduction. Policies that strengthen access to basic services and create jobs in labor-intensive sectors are therefore needed so that the benefits of investment and exports are distributed more equitably.
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DOI: https://doi.org/10.20961/jaedc.v10i2.101700
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