Priviet Social Sciences Journal
Vol. 5 No. 8 (2025): August 2025

Analyzing the impact of inflation, exports and unemployment on economic growth in indonesia: A fixed effects least squares dummy variable panel regression approach

Harismahyanti A., Andi (Unknown)
Nur’eni, Nur’eni (Unknown)



Article Info

Publish Date
29 Aug 2025

Abstract

This study explores the impact of inflation, exports, and unemployment on economic growth in Indonesia from 2019 to 2023 using a Fixed Effects Model Least Squares Dummy Variable (FEM LSDV) panel regression approach. The analysis incorporates both province-specific and time-specific effects to provide a comprehensive understanding of the dynamic relationships between these variables and their collective influence on Indonesia's economic growth. The results indicate that exports have a significant positive effect on economic growth, consistent with existing literature highlighting the importance of exports in driving economic performance. In contrast, inflation and unemployment were not found to have statistically significant impacts, possibly due to the model’s focus on regional and temporal variations. The study furthermore reveals significant regional disparities in economic growth, with provinces like DKI Jakarta, Banten, and Kalimantan Timur showing negative growth, while others, such as Sulawesi Selatan and Gorontalo, experienced above-average growth. The FEM LSDV model demonstrates strong explanatory power, with an R-squared value of 0.9162, indicating that it effectively captures the variability in economic growth across regions and over time. The findings suggest that promoting export-driven growth and addressing regional imbalances are key strategies for fostering sustainable economic development in Indonesia.

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Journal Info

Abbrev

PSSJ

Publisher

Subject

Economics, Econometrics & Finance Education Environmental Science Law, Crime, Criminology & Criminal Justice Social Sciences

Description

PSSJ: Priviet Social Sciences Journal is an open access, monthly peer-reviewed international journal published by PRIVIETLAB. It provides an avenue to academicians, researchers, managers and others to publish their research work that contributes to the knowledge and theory of Social Sciences. PSSJ ...