<![CDATA[AbstractOne indicator to assess the economic condition of a country is Gross Domestic Product (GDP) at the national level or Gross Regional Domestic Product (GRDP) at the regional level. The sector that contributes the most to Indonesia's GDP is the manufacturing industry. One of the most crucial components within the manufacturing sector is the micro and small-scale industry (MSI). The presence of MSIs significantly contributes to economic development, closely tied to the geographical location among regions, thereby exerting spatial influence on the GRDP of a region. Hence, an analysis of GRDP considering spatial aspects is necessary, investigating the impact of the Micro and Small-scale Industry (MSI) sector on economic growth in Indonesia using spatial panel data regression. The spatial models constructed in this study include the Spatial Autoregressive Model (SAR) and Spatial Error Model (SEM) involving fixed-effect influence. This research aims to describe and identify the factors within MSIs that influence economic growth in each province of Indonesia. The results indicate that the appropriate model used is the Spatial Autoregressive Model Fixed Effect (SAR-FE). Overall, there are two independent variables significantly affecting economic growth, namely the number of micro and small-scale industries (X1) and inflation (X6). The results show that an increase in the percentage of these two variables will decrease the economic growth rate. Keywords: Gross Regional Domestic Product, Economic Growth, Micro and Small Industries, Spatial Autoregressive Model Fixed Effect ]]>
Copyrights © 2024
