DIBALIK ARUS MODAL: MENGUJI DETERMINASI PENANAMAN MODAL ASING (PMA) DAN PENANAMAN MODAL DALAM NEGERI (PMDN) DALAM MENURUNKAN PENGANGGURAN DI JAWA BARAT

Daniel Simamora

doi:10.34147/crj.v12i01.435

Authors

Daniel Simamora Dinas Penanaman Modal dan Pelayanan Terpadu Satu Pintu Kabupaten Bandung

DOI:

https://doi.org/10.34147/crj.v12i01.435

Keywords:

Domestic Direct Investment, Foreign Direct Investment , Open Unemployment Rate

Abstract

West Java Province faces a development paradox, as one of a top national investment destination, it consistently records the highest Open Unemployment Rate (OUR). This study aims to analyze the determinants of Foreign Direct Investment (FDI) and Domestic Direct Investment (DDI) on the OUR across 27 regencies/cities in West Java. Using panel data from 2020-2024, this study applies a Random Effect Model (REM) with robust standard errors, controlling for the Human Development Index (HDI) and Economic Growth Rate. The estimation results show that DDI has a significant negative effect on the OUR, indicating its role in labor absorption. Conversely, FDI has a significant positive effect, implying its capital-intensive nature and potential skill mismatch. Economic growth is proven to significantly reduce the OUR, while HDI paradoxically shows a positive effect. The main conclusion is that not all investments impact the labor market equally. The policy implication is a needed shift from investment quantity to quality, prioritizing labor-intensive domestic investments and aligning human resource development with industry needs.

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