Rona Wulan Ningtiyas (1), Ririt Iriani Sri Setiawari (2)
General Background: Regional economic growth is a major indicator of welfare, industrial development, income generation, and equitable development outcomes. Specific Background: East Java Province recorded fluctuating growth from 2006 to 2025 despite rising Domestic Investment, Foreign Direct Investment, and labor absorption. Knowledge Gap: The mismatch between capital expansion, labor growth, and unstable regional output creates an empirical gap with neoclassical growth assumptions. Aims: This study analyzes the partial and simultaneous relationships of Domestic Investment, Foreign Direct Investment, and labor absorption with East Java economic growth. Results: Using secondary time-series data from 2006–2025 and a Lin-Log multiple regression model with EViews 12, Domestic Investment showed a negative non-significant result, Foreign Direct Investment showed a positive non-significant result, and labor showed a negative significant result at the 10% level. Simultaneously, all predictors were significant with F-statistic 3.353787, probability 0.045319, and R-squared 0.386064. Novelty: This study identifies labor saturation within East Java’s long-term regional growth model. Implications: Policymakers should move beyond raw capital injection by strengthening labor-intensive downstream manufacturing and targeted vocational education.
Highlights:
Keywords: Domestic Investment, Foreign Investment, Labor, Economic Growth, Lin-Log Model
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