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Research Article Open access CC BY 4.0

Special Economic Zones and Local Economic Development: An Indonesia Perspective

Shinta Riana Anggraini, I Wayan Suparta, Asih Murwiati

Asian Journal of Economics, Business and Accounting · pp. 258–277 · Published 19 Jul 2025

10.9734/ajeba/2025/v25i71889

Abstract

This study aims to analyze the determinants of economic growth in regencies/municipalities that host Special Economic Zones (SEZs) in Indonesia, using data from 14 SEZs spread across various regions. The variables analyzed include road infrastructure, investment, Regional Original Revenue (PAD), Labor Force Participation Rate (LFPR), and Human Development Index (HDI). The results show that road infrastructure, investment, LFPR, and HDI do not have a significant effect on economic growth in the short term, but have a significant effect in the long term. Meanwhile, PAD has a positive and significant effect on economic growth in both the short and long term. These findings highlight the importance of long-term development and PAD optimization in driving economic growth in SEZ regions.

Economic growth Special Economic Zones (SEZs) road infrastructure investment Regional Original Revenue (PAD) Labor Force Participation Rate (LFPR) Human Development Index (HDI)

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