Analysis of Economic Impact of Road Transportation Investment in North Sumatra

International Journal of Economics and Management Studies

© 2020 by SSRG - IJEMS Journal

Volume 7 Issue 2

Year of Publication : 2020

Authors : Syarief Gerald Prasetya ,Yustiana Wardhani

10.14445/23939125/IJEMS-V7I2P102

How to Cite?

Syarief Gerald Prasetya ,Yustiana Wardhani, "Analysis of Economic Impact of Road Transportation Investment in North Sumatra," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 2, pp. 3-11, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I2P102

Abstract:

The Indonesian Government has been trying to improve the investment, especially transportation infrastructure, which has been driving all economic efforts. This kind of accessibility can accelerate the process of inter-districts integration reaching the isolated places so that equal distribution will happen.   This research aims to prove the impact of infrastructure investment of road transportation upon the economic development in North Sumatra empirically.   Multiplier analysis has to be done figuring out the impact of infrastructure investment of road transportation upon the output and the revenue produced in the area researched.  This research has applied Input-Output analysis. As a matter of fact, the value of forwarding linkage of the construction sector is in the third place, and the value of backward linkage of the construction sector is in the first place. However, the superior sector in North Sumatra Province is the industrial manufacturing sector. But, the construction sector is in the first place refers to the value of multiplier revenue.    Nevertheless, the value of manpower employment is in fifth place, and the value of multiplier output of the construction sector is in second place.  Actually, the infrastructure investment of road transportation has increased the value of multiplier revenue, manpower employment, and output. And the infrastructure investment is able to increase PDRB at all economic sectors in North Sumatra.   Therefore, the government should have prepared a policy or regulation which can increase the investment of private sectors because it can provide a significant impact on the economics of the district and can reduce the government budget expenditure.

Keywords:

Investment, Road transportation, Multiplier, Input-Output analysis

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