The Impact of Public Capital Investments on the Revenue Growth of Medium Enterprise in Indonesia

Darius Tirtosuharto

Darius Tirtosuharto Bank of Indonesia

Keywords: public capital investment, investment, revenue growth, indonesia

Abstract

Public capital investment represents the role of state and local governments in supporting greater capacity of private enterprises to gain success in a market economy measured by revenue growth. Medium enterprises are considered as the catalysts for economic growth and competitiveness particularly in developing countries due to efficiency and flexibility in an adverse economic environment. Using aggregate data of 30 states (provinces) in Indonesia from 1997-2002, the impact of public capital investment on the revenue growth of medium enterprise is examined. The paper finds that only medium enterprises in the industrial and trading sector benefited from public capital investments and the most optimum capital investment is in transport infrastructure.

Author Biography

Darius Tirtosuharto, Bank of Indonesia

TIRTOSUHARTO, Darius is an economist at the Regional Economic and Inflation Division, Department of Economic Research and Monetary Policy, Bank of Indonesia. He conducts macro regional assessment, growth forecast and analysis on sectoral development and fiscal policy at the regional level. He has done consultancy work for the Asian Development Bank for a study on decentralization and economic growth in Indonesia. In addition, he has also involved in the discussion on the regional financing and development of municipal bond in Indonesia. He received a PhD in Public Policy from George Mason University in Virginia.
Author contact’s details: Regional Economic and Inflation Division, Economic Research and Monetary Policy Department, Bank of Indonesia, Sjafruddin Prawiranegara Tower 18th Floor, Jl. M. H. Thamrin No. 2, Jakarta 10350; e-mail: derry.tirtosuharto@gmail.com.

References

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