Track: Energy

Abstract

Adequacy of electricity in one nation must be provided by the State to increase the country's national production. In the government policy commanded by President Joko Widodo infrastructure provision including electricity is a priority. Therefore this study takes a hypothesis; the availability of electricity and central government policy greatly affect investment in Indonesia for economic development. This study uses panel data analysis covering 34 provinces in the territory of the Republic of Indonesia with data for 8 years’ time series. Thus, this study chooses the best and most suitable econometric model that is random effects models through the stages of statistical test by using Hausman, prob>chi2 : 0.05>0.000. Not only the existence of electricity but also the availability of electricity significantly affects production activities that are generally in the service industry, manufacturing and other sectors. The government policy that is fast and precise on this matter will determine the acceleration of economic growth both directly and indirectly.