Infrastructure Development and Population Dynamics as Determinants of Regional Economic Growth

Evidence from Java Island, Indonesia

Abstract

This study investigates the impact of infrastructure development and population growth on
regional economic performance across the provinces of Java Island, Indonesia. Using panel data
covering the period from 2016 to 2021 obtained from the Ministry of Finance and the Central
Bureau of Statistics, the study applies a Random Effect Model to assess the contribution of road
infrastructure, electricity infrastructure, and population to provincial Gross Regional Domestic
Product (GRDP). The empirical results reveal that road and electricity infrastructure exert
positive and statistically significant effects on GRDP, indicating that improvements in
transportation networks and energy supply directly enhance regional productivity and economic
activity. In contrast, population growth shows no significant effect, suggesting that demographic
expansion alone does not guarantee economic advancement without corresponding
employment opportunities and infrastructure quality. The model explains 84.14 percent of the
variation in GRDP, confirming the strong explanatory power of infrastructure variables. These
findings highlight the importance of sustained investment in physical infrastructure to promote
inclusive and balanced economic growth across regions