The Impact of Regional Competitiveness on GRDP: Mediating Roles of Unemployment and Poverty in Indonesia

Authors

  • Pramudi Harsono

    Faculty of Economics and Business, Universitas Jenderal Sudirman, Purwokerto, Banyumas, Jawa Tengah, 53122, Indonesia and Faculty of Economics and Business, Universitas Bina Bangsa, Serang Banten, 42124, Indonesia

  • Istiqomah

    Faculty of Economics and Business, Universitas Jenderal Sudirman, Purwokerto, Banyumas, Jawa Tengah, 53122, Indonesia

  • Diah Setyorini Gunawan

    Faculty of Economics and Business, Universitas Jenderal Sudirman, Purwokerto, Banyumas, Jawa Tengah, 53122, Indonesia

How to Cite

Harsono, P., Istiqomah, & Gunawan , D. S. . (2025). The Impact of Regional Competitiveness on GRDP: Mediating Roles of Unemployment and Poverty in Indonesia. International Journal of Accounting and Economics Studies, 12(4), 21-28. https://doi.org/10.14419/bq5qsk45

Received date: June 13, 2025

Accepted date: July 23, 2025

Published date: August 1, 2025

DOI:

https://doi.org/10.14419/bq5qsk45

Keywords:

Business; Economic Growth; Regional Competitiveness; Socioeconomic; Unemployment

Abstract

This research aims to investigate the impact of regional competitiveness on Gross Regional Domestic Product (GRDP) in Indonesia, focusing on the mediating roles of unemployment and poverty in this relationship. The study seeks to provide insights into how enhancing re-‎gonial competitiveness can influence economic growth while addressing critical socioeconomic issues. Methodology: A mixed-methods ‎approach was employed, combining quantitative and qualitative data. Quantitative data were sourced from secondary reports, including ‎those from BPS and the World Bank, covering 34 Indonesian provinces from 2010 to 2022. Statistical analyses, including regression and ‎correlation, were conducted to examine the relationships between regional competitiveness, GRDP, unemployment, and poverty. Qualitative ‎data were collected through surveys and in-depth interviews to enrich the understanding of the quantitative findings. The findings indicate ‎that regional competitiveness positively affects GRDP, particularly through factors such as infrastructure and institutional development. ‎However, the influence of human resources, market factors, and innovation ecosystems on GRDP is significantly reduced when poverty ‎and unemployment are considered as intervening variables. This highlights the complex interplay between these factors. The study concludes that while enhancing regional competitiveness is crucial for economic growth, it must be coupled with effective strategies to reduce ‎poverty and unemployment. Policymakers are encouraged to focus on strengthening regional infrastructure and institutions to optimize ‎GRDP outcomes. Future research should explore additional indicators of competitiveness and sector-specific impacts to further inform ‎regional development strategies in Indonesia‎.

References

  1. Acemoglu D (2005), Politics and economics in weak and strong states. Journal of Monetary Economics, 52(7), 1199–1226. https://doi.org/10.1016/j.jmoneco.2005.05.001.
  2. Aiginger K & Vogel J (2015), Competitiveness: from a misleading concept to a strategy supporting Beyond GDP goals. Competitiveness Review an International Business Journal Incorporating Journal of Global Competitiveness, 25(5), 497–523. https://doi.org/10.1108/CR-06-2015-0052.
  3. Andersson S (2011), International entrepreneurship, born globals and the theory of effectuation. Journal of Small Business and Enterprise Devel-opment, 18(3), 627–643. https://doi.org/10.1108/14626001111155745.
  4. Asheim BT, Boschma R & Cooke P (2011), Constructing regional advantage: platform policies based on related variety and differentiated knowledge bases. Regional Studies, 45(7), 893–904. https://doi.org/10.1080/00343404.2010.543126.
  5. Balestrieri M (2014), Rurality and competitiveness. Some observations on the local area. International Journal of Rural Management, 10(2), 173–197. https://doi.org/10.1177/0973005214546599.
  6. Cooksey RW (2020), Descriptive statistics for summarising data. In Springer eBooks, 61–139. https://doi.org/10.1007/978-981-15-2537-7_5.
  7. Crawford J, Cui ZY & Kewley D (2023), Government finance, loans, and guarantees for small and medium enterprises (SMEs) (2000–2021): A systematic review. Journal of Small Business Management, 62(5), 2607–2637. https://doi.org/10.1080/00472778.2023.2246061.
  8. Dzemydaitė G (2021), The Impact of Economic specialization on regional Economic development in the European Union: Insights for Formation of Smart Specialization Strategy. Economies, 9(2), 76. https://doi.org/10.3390/economies9020076.
  9. Esteve P, Langlois B, Chabani L, Platzer W & Mouchoux J (2019), MAESTRIA: a new tool to support collaborative building and sharing of an in-tegration, verification, validation, and qualification strategy. In Springer eBooks, 93–102. https://doi.org/10.1007/978-3-030-34843-4_8.
  10. Floerkemeier H, Spatafora N & Venables A (2021), Regional disparities, growth, and inclusiveness. IMF Working Paper, 21(39). https://doi.org/10.5089/9781513569505.001.
  11. George DA (2011), Chapter 9 Stability of Growth Models with Generalized Lag Structures. In Frontiers of economics and globalization, 247–260. https://doi.org/10.1108/S1574-8715(2011)0000011014.
  12. Glass MR, Addie JD & Nelles J (2019), Regional infrastructures, infrastructural regionalism. Regional Studies, 53(12), 1651–1656. https://doi.org/10.1080/00343404.2019.1667968.
  13. Grassia MG, Marino M, Mazza R, Misuraca M, Zavarrone E & Friel M (2022), Regional Competitiveness: A Structural-Based Topic Analysis on Recent literature. Social Indicators Research, 173(1), 83–108. https://doi.org/10.1007/s11205-022-02951-4.
  14. Harris R (2010), Models of Regional Growth: Past, Present and Future. Journal of Economic Surveys, 25(5), 913–951. https://doi.org/10.1111/j.1467-6419.2010.00630.x.
  15. Heintz J (2015), Employment, economic development, and poverty reduction. In Developmental Pathways to Poverty Reduction, 30–54. https://doi.org/10.1057/9781137482549_2.
  16. Hossain M, Mendiratta V & Savastano S (2024), Agricultural and rural development interventions and poverty reduction: Global evidence from 16 impact assessment studies. Global Food Security, 43, 100806. https://doi.org/10.1016/j.gfs.2024.100806.
  17. Huggins R (2008), Regional Competitive intelligence: benchmarking and policy-making. Regional Studies, 44(5), 639–658. https://doi.org/10.1080/00343400802331312.
  18. Huggins R (2009), Forms of network resource: knowledge access and the role of Inter‐Firm networks. International Journal of Management Re-views, 12(3), 335–352. https://doi.org/10.1111/j.1468-2370.2009.00266.x.
  19. Kouskoura A, Kalliontzi E, Skalkos D & Bakouros I (2024), Assessing the key factors measuring regional competitiveness. Sustainability, 16(6), 2574. https://doi.org/10.3390/su16062574.
  20. Kovács P, Bodnár G & Lengyel I (2023), Relationships between factors of regional competitiveness in Central and Eastern Europe. Journal of In-ternational Studies, 16(3), 78–96. https://doi.org/10.14254/2071-8330.2023/16-3/4.
  21. Liang T (2024), Innovating regional policy frameworks in China: The Strategic Zone + Type Zone Model for Sustainable Growth. Journal of the Knowledge Economy. https://doi.org/10.1007/s13132-024-02022-8.
  22. Luckhurst J (2017), Globalization, inequality, and challenges to free trade. In Springer eBooks, 117–153. https://doi.org/10.1007/978-3-319-63157-8_5.
  23. Mattoon RH (2004), Infrastructure and State Economic Development: A survey of the issues (I-G). Economic Conference. https://statcan.gc.ca/pub/11f0024m/pdf/papers-etudes/4193813-eng.pdf.
  24. Montolio D & Solé‐Ollé A (2008), Road investment and regional productivity growth: the effects of vehicle intensity and congestion. Papers of the Regional Science Association, 88(1), 99–119. https://doi.org/10.1111/j.1435-5957.2008.00167.x.
  25. Naeem M, Ozuem W, Howell K & Ranfagni S (2023), A Step-by-Step process of thematic analysis to develop a conceptual model in qualitative research. International Journal of Qualitative Methods, 22. https://doi.org/10.1177/16094069231205789.
  26. Nijkamp P (1986), Infrastructure and regional development: A multidimensional policy analysis. Empirical Economics, 11(1), 1–21. https://doi.org/10.1007/BF01978142.
  27. Oktaviana N & Amalia N (2018), Gross Regional Domestic Product Forecasts Using Trend Analysis: Case Study of Bangka Belitung Province. Journal of Economics & Development Studies, 19(2). https://doi.org/10.18196/jesp.19.2.5005.
  28. Palei T (2015), Assessing the impact of infrastructure on economic growth and global competitiveness. Procedia Economics and Finance, 23, 168–175. https://doi.org/10.1016/S2212-5671(15)00322-6.
  29. Panzera D & Postiglione P (2021), The impact of regional inequality on economic growth: a spatial econometric approach. Regional Studies, 56(5), 687–702. https://doi.org/10.1080/00343404.2021.1910228.
  30. Paulus TM (2022), Using qualitative data analysis software to support digital research workflows. Human Resource Development Review, 22(1), 139–148. https://doi.org/10.1177/15344843221138381.
  31. Pavlova M (2019), Emerging environmental industries: impact on required skills and TVET systems. International Journal of Training Research, 17(sup1), 144–158. https://doi.org/10.1080/14480220.2019.1639276.
  32. Riyanto, Iqbal M, Supriono, Fahmi MRA & Yuliaji ES (2023), The effect of community involvement and perceived impact on residents’ overall well-being: Evidence in Malang marine tourism. Cogent Business & Management, 10(3). https://doi.org/10.1080/23311975.2023.2270800.
  33. Ruja IN, Sumarmi S & Idris I (2024), Programs, Opportunities, and Challenges in Poverty Reduction: A Systematic review. SAGE Open, 14(2). https://doi.org/10.1177/21582440241256242.
  34. Schumpeter JA (2017), The Theory of Economic Development. In Routledge eBooks. https://doi.org/10.4324/9781315135564.
  35. Si S, Ahlstrom D, Wei J & Cullen J (2019), Business, entrepreneurship and innovation toward poverty reduction. Entrepreneurship and Regional Development, 32(1–2), 1–20. https://doi.org/10.1080/08985626.2019.1640485.
  36. Sihotang M, Sihotang MM, Sihotang D, Ernst S & Freitas JL (2023), Strategies for National Transformation: From developing to developed. Jour-nal of Social Science Applied and Research, 11(2), 138–158. https://doi.org/10.35335/zprqxp40.
  37. Sinaga M (2020), Analysis of effect of GRDP (Gross Regional Domestic Product) per capita, inequality distribution income, unemployment and HDI (Human Development Index) on poverty. Budapest International Research and Critics Institute (BIRCI-Journal) Humanities and Social Sci-ences, 3(3), 2309–2317. https://doi.org/10.33258/birci.v3i3.1177.
  38. Straub S (2008), Infrastructure and Development: A Critical appraisal of the macro level literature. In World Bank, Washington, DC eBooks. https://doi.org/10.1596/1813-9450-4590.
  39. Suparman S & Muzakir M (2023), Regional inequality, human capital, unemployment, and economic growth in Indonesia: Panel regression ap-proach. Cogent Economics & Finance, 11(2). https://doi.org/10.1080/23322039.2023.2251803.
  40. Tabash MI, Farooq U, Matar A & Al-Absy MSM (2024), Role of governance in attracting foreign direct investment inflow: empirical evidence from South Asia region. Cogent Economics & Finance, 12(1). https://doi.org/10.1080/23322039.2024.2358930.
  41. Talitha T, Firman T & Hudalah D (2019), Welcoming two decades of decentralization in Indonesia: a regional development perspective. Territory Politics Governance, 8(5), 690–708. https://doi.org/10.1080/21622671.2019.1601595.
  42. Thompson MN & Dahling JJ (2019), Employment and poverty: Why work matters in understanding poverty. American Psychologist, 74(6), 673–684. https://doi.org/10.1037/amp0000468.
  43. Thye GL, Law SH & Trinugroho I (2022), Human capital development and income inequality in Indonesia: Evidence from a nonlinear autoregres-sive distributed lag (NARDL) analysis. Cogent Economics & Finance, 10(1). https://doi.org/10.1080/23322039.2022.2129372.
  44. Tomaszewski LE, Zarestky J & Gonzalez E (2020), Planning Qualitative research: design and decision making for new researchers. International Journal of Qualitative Methods, 19. https://doi.org/10.1177/1609406920967174.
  45. Ulum I, Mudrifah M & Sulistyono SW (2023), Regional intellectual capital (RIC) indicators in Indonesia. Cogent Business & Management, 10(1). https://doi.org/10.1080/23311975.2022.2163557.
  46. Van Niekerk A (2020), Inclusive Economic Sustainability: SDGs and global inequality. Sustainability, 12(13), 5427. https://doi.org/10.3390/su12135427.
  47. Vaz R, de Carvalho JV & Teixeira SF (2023), Developing a digital business incubator model to foster entrepreneurship, business growth, and Aca-demia–Industry connections. Sustainability, 15(9), 7209. https://doi.org/10.3390/su15097209.
  48. Zamawe F (2015), The implication of using NVIVO software in qualitative data analysis: Evidence-Based Reflections. Malawi Medical Journal, 27(1), 13. https://doi.org/10.4314/mmj.v27i1.4.

Downloads

How to Cite

Harsono, P., Istiqomah, & Gunawan , D. S. . (2025). The Impact of Regional Competitiveness on GRDP: Mediating Roles of Unemployment and Poverty in Indonesia. International Journal of Accounting and Economics Studies, 12(4), 21-28. https://doi.org/10.14419/bq5qsk45

Received date: June 13, 2025

Accepted date: July 23, 2025

Published date: August 1, 2025