P-ISSN: 2808-5957
E-ISSN: 2808-6724
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2259
A STUDY OF ECONOMIC DRIVEN SECTORS TO INCREASE THE
DOMESTIC AND FOREIGN INVESTMENT
Veggy Anugrah Sasmita
1
, Ade Wahyudi
2
, Faizan Dalilla
3
Department of Urban and Regional Planning, Universitas Islam Riau, Pekanbaru, Riau, Indonesia
1
veggyanugrahs@gmail.com
2
adewahyudi@eng.uir.ac.id
3
dalillafaizan@eng.uir.ac.id
ARTICLE INFO
ABSTRACT
Published: January 24
th
, 2023
Bengkalis regency rank first in the domestic and foreign investment in Riau
Province in 2021. However, along with the economic growth, the initial
potential sectors such as mining and excavation showed a significant
decrease between 2017 and 2020. Meanwhile, the mining and excavation
sector used to be the biggest contribution to the economic development of
Bengkalis. This research aims to analyze the driving sectors in raising the
domestic and foreign investment in Bengkalis Regency. The research is an
explanatory research to explain the relationship and influence of research
variables in the GRDP sector on domestic investment and foreign capital.
The analysis used multiple regression by SPSS software and regional
economic analyses. The result indicated that the domestic investment is
affected by secondary sectors, while the foreign investment is affected by the
secondary and tertiary sectors.
Keywords: economic sector,
domestic investment, foreign
investment
This work is licensed under CC
BY-SA 4.0
INTRODUCTION
Bengkalis Regency is one of the districts that has the highest economic growth in Riau
Province in 2020 or around 15.82% of the total GRDP on the basis of prevailing prices in all
regencies/cities in Riau (Statistics of Riau Province, 2021). In addition, the large number of
investment opportunities in the fields of industry, agribusiness and tourism is one of the poles in
increasing regional economic growth in urban areas and border areas in Bengkalis Regency.
Based on Government Regulation Number 13 of 2017 related to the National Spatial Plan,
the direction for the development of spatial planning in Bengkalis Regency are the urban system
for the category of National Strategic Activity Centers (PKSN, Pusat Kawasan Strategis Nasional)
with a strategy to accelerate the development of main cities in the border area, and the urban system
in the category of Regional Activity Centers (PKW, Pusat Kegiatan Wilayah) with a strategy to
encourage the development of industrial centers. In this case, the role and position of Bengkalis
Regency in increasing domestic investment and foreign investment is very large because Bengkalis
Regency is located in the international gateway and border of Riau Province which can encourage
regional and national economic growth centers there. In addition, the economic growth structure
in Bengkalis Regency (5.29%) is above the average national economic growth (5.1%), and the per
capita income (000) of Bengkalis Regency (Rp. 139,225) is also much greater than the national
average (Rp.53,715) in 2020.
Judging from the internal economic structure of Bengkalis Regency, only certain sectors
have a positive influence and development on the development of investment in Bengkalis
Regency. Then, potential sectors are also decreasing in number and contribution to investment in
Bengkalis Regency (Wibowo, 2019). The absence of integration of policies and programs to
improve local infrastructure and economy in border areas is also one of the causes of uneven
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economic growth in Bengkalis Regency, but only centralized in its urban areas. Meanwhile, the
tourism potential found in rural areas such as on Rupat Island can be used as an alternative source
of economic income and investment in Bengkalis Regency in the future (Novita et al., 2015).
So far, the researchers have found no research discussing this topic. The closest might be
research conducted by Sari (2021) and Taufiq (2021), both in Bengkalis. Sari (2021) discussed
how retribution for fishery business permits can increase Bengkalis’ local revenue while Taufiq
(2021) analyzed the region’s implementation of public policy integrated business licensing
services in the Department of Investment and its integrated one-way service. As implied,
researchers barely discuss how economic sectors may increase the region’s domestic and foreign
investment. Therefore, this study aims to examine the economic driving sectors of increasing
domestic and foreign investment in Bengkalis Regency to realize a sustainable, competitive
regional spatial planning, and as a source of investment development in supporting regional
economic development programs in Bengkalis Regency.
METHOD
The research is an explanatory research to explain the relationship and influence of research
variables (Creswell, 2012) in the GRDP sector on domestic investment and foreign capital. The
type of data used in this study was secondary data, in which the data used as a reference in
measuring and calculating the sectors driving the economy was Gross Regional Domestic Product
(GRDP, Produk Domestik Regional Bruto/PDRB) data on the basis of the Prevailing Price (ADHB,
Atas Dasar Harga Berlaku) of Riau Province and Bengkalis Regency in 2017-2019. Meanwhile,
data on the development and changes in the value of domestic investment and foreign investment
were obtained from the 2017-2019 Bengkalis Regency’s PMDN (Penanaman Modal Dalam
Negeri, Domestic Investment) and PMA (Penanaman Modal Asing, Foreign Investment)
realization data.
In this study, the data used was ADHB's GRDP because researchers would like to see the
influence of economic driving sectors on increasing investment. In addition, the data were
generated from aggregate revenue data assessed from the prevailing price in each year, when
assessing production, intermediate costs, as well as the assessment of the value-added component
and expenditure component of GRDP (Amin, 2015). In addition, the analytical techniques used in
this study were analysis of regional potential and economy, analysis of regional economic growth,
analysis of regional economic structure, and analysis of sectors driving the regional economy.
RESULT AND DISCUSSION
Economic Potential of Bengkalis Regency
Economic Potential (LQ) and Economic Shift (DLQ)
Based on the results of the LQ analysis, of the 17 sectors contained in the GRDP component,
the base/flagship sector is in the mining and quarrying sector (2.69), and the water supply and
waste management sector (1.00). However, future sector shifts show that other sectors such as
agriculture, fisheries, industry, construction, plantations and other tertiary sectors also have the
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potential to become base sectors in the future due to the tendency of growth and development of
activities/activities in each sector.
In practice, the mining and quarrying sector is the sector that contributes the highest in
Bengkalis Regency. This is due to the existence of PT. PT. Chevron Pacific Indonesia located in
Mandau Subdistrict, PT. Pertamina RU II Production in Pakning River, and PT. Chevron in
Bengkalis Regency. In addition, the processing industry sector is also the main contibutor in
economic development in Bengkalis Regency, such as the Crude Palm Oil processing industry in
Mandau District and and the Petroleum Refinery in SeiPakning. Thus, the leading sectors in
Bengkalis Regency are mining and quarrying. The following is table 1 of the results of the LQ
analysis in Bengkalis Regency in 2017-2019:
Table 1. LQ and DLQ Distribution in Bengkalis Regency
Business Field
LQ
Information
DLQ
Information
2017
2018
2019
Agriculture, Forestry, and
Fisheries
0,38
0,37
0,40
Non Basis
1,9
Potential Base
Mining and Quarrying
2,57
2,48
2,69
Basis
2,7
Potential Base
Processing Industry
0,51
0,48
0,51
Non Basis
1,2
Potential Base
Electricity and Gas
Procurement
0,38
0,38
0,37
Non Basis
0,9
No Potential
Base
Water Procurement, Waste
Management
0,93
0,90
1,00
Basis
2,0
Potential Base
Construction
0,31
0,30
0,31
Non Basis
1,1
Potential Base
Large Trade and Retail;
Repair
0,60
0,57
0,60
Non Basis
1,2
Potential Base
Transportation and
Warehousing
0,29
0,27
0,29
Non Basis
0,9
No Potential
Base
Provision of
Accommodation and Food
and Drink
0,49
0,46
0,49
Non Basis
1,0
Potential Base
Information and
Communication
0,45
0,43
0,46
Non Basis
1,2
Potential Base
Financial Services and
Insurance
0,28
0,27
0,28
Non Basis
1,1
Potential Base
Real Estate
0,30
0,30
0,31
Non Basis
1,4
Potential Base
Company Services
0,62
0,60
0,62
Non Basis
1,1
Potential Base
Government
Administration, Defense
0,54
0,52
0,56
Non Basis
1,4
Potential Base
Education Services
0,53
0,53
0,55
Non Basis
1,4
Potential Base
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2023
Health Services and Social
Activities
0,40
0,39
0,40
Non Basis
1,2
Potential Base
Other services
0,45
0,44
0,47
Non Basis
0,1
No Potential
Base
Source: Analysis Results, 2022
Economic Growth of Bengkalis Regency
Sectoral Contribution and Growth
Basically, the economy in Bengkalis Regency is very dependent on natural resources, namely
petroleum. The amount of contribution of this sector to the economic development of the region
is 50% of the total GRDP of Bengkalis Regency.
From the results of the contribution analysis in 2017-2019, the sectors that contributed
significantly to the economy in Bengkalis Regency were agriculture, forestry and fisheries (9.4%),
mining and quarrying (65.2%), construction (3%) large trade and retail, repair (6.5%). Meanwhile,
the sectors that contributed the least were in the transportation and warehousing sector (0.3%), the
provision of accommodation and food and drink (0.3%), information and communication (0.3%),
financial and insurance services (0.3%), real estate (0.3%), education services (0.3%) and other
services (0.3%). By looking at these economic conditions, it further shows that the Mining and
Quarrying business field and the processing industry are still the business fields that have the
largest role in the formation of the economic structure of the Bengkalis Regency area. However,
unfortunately the growth rate of the mining and quarrying sector shows negative results, this is
due to the reduced amount of production and problems that arise in some mining sites, such as
activity permits, environmental problems, control and supervision in mining areas, etc. The
following is a table of 2 sectoral contributions and growth in Bengkalis Regency
Table 2. Economic Contribution in Bengkalis Regency
Business Field
Per-Sector GRDP
Contribution (%)
Per-Sector Growth
Rate (%)
2017
2018
2019
2017-2018
2018-2019
Agriculture, Forestry and Fisheries
9,0
8,4
9,4
4,3
6,6
Mining and Quarrying
66,7
68,9
65,2
15,9
-9,8
Processing Industry
12,9
11,8
13,1
3,1
5,5
Electricity and Gas Procurement
0,0
0,0
0,0
8,9
8,1
Water Procurement, Waste
Management
0,0
0,0
0,0
1,7
3,6
Construction
2,8
2,7
3,0
8,6
7,0
Large Trade and Retail, Repairs
5,8
5,6
6,5
7,8
10,5
Transportation and Warehousing
0,3
0,2
0,3
3,7
6,1
Provision of Accommodation and
Food and Drink
0,3
0,2
0,3
5,6
2,7
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Information and Communication
0,3
0,3
0,3
7,7
11,7
Financial Services and Insurance
0,3
0,2
0,3
7,3
1,6
Real Estate
0,3
0,3
0,3
7,7
6,5
Company Services
0,0
0,0
0,0
12,1
6,4
Government Administration,
Defense
0,8
0,8
0,8
3,0
5,0
Education Services
0,3
0,3
0,3
10,00
7,2
Health Services and Social Activities
0,1
0,1
0,1
11,1
11,5
Other services
0,2
0,2
0,3
13,4
11,3
Source: Analysis Results, 2022
Growth Ratio Model
Basically, the growth ratio model is obtained from the real value and face value and then the
combination of the two comparisons will obtain a description of potential economic activities at
the Bengkalis Regency regional level. Based on the results of the analysis, then:
1) The nominal value at the Bengkalis Regency Level, the manufacturing, construction,
transportation and warehousing industry sectors, Provision of Accommodation and Food
and Drink, Information and Communication, Financial and Insurance Services, Real
Estate, Corporate Services, Education Services, Health Services and Social Activities and
other services have a significant growth ratio in Riau Province. Thus, the growth of the
above sectors can bring benefits to regional income in Bengkalis Regency.
2) The value of Rill at the Riau Provincial Level, the agriculture, forestry and fisheries, mining
and quarrying, water procurement and waste management, large and retail trade,
information and communication, real estate, government administration, education
services and other services have positive growth and stand out in the internal scope of
Bengkalis Regency. However, it is expected that other sectors in the future will have even
greater growth in the future in order to increase economic growth in the Bengkalis Regency
and Riau Province. The following is table 5 Growth Ratio Models in Bengkalis Regency:
Table 3. Growth Ratio Model in Bengkalis Regency
Sector
RPr
(Riau Province)
RPs
(Bengkalis District)
Real
Nominal
Real
Nominal
Agriculture, Forestry, and Fisheries
0,80
-
1,63
+
Mining and Quarrying
0,18
-
3,03
+
Processing Industry
1,05
+
0,97
-
Electricity and Gas Procurement
2,78
0,75
-
Water Procurement and Waste Management
0,33
-
1,91
+
Construction
2,07
+
0,91
-
Large Trade and Retail, Repairs
2,20
+
1,01
+
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Transportation and Warehousing
1,62
+
0,72
-
Provision of Accommodation and Food and
Drink
1,18
+
0,84
-
Information and Communication
2,36
+
1,00
+
Financial Services and Insurance
1,23
+
0,85
-
Real Estate
1,51
+
1,13
+
Company Services
2,56
+
0,88
-
Government Administration, Defense, and
Compulsory Social Security
0,81
-
1,18
+
Education Services
1,84
+
1,14
+
Health Services and Social Activities
2,85
+
0,98
-
Other Services
2,71
+
1,13
+
Source: Analysis Results, 2022
Regional Economic Structure of Bengkalis Regency
Sector Shift Structure and Economic Competitiveness
Regional economic shift structure analysis is an analytical technique that aims to see the shift
or change of a sector at the district level to the components of regional economic growth at the
provincial level (Isabhandia & Setiartiti, 2021). Thus, it will be useful in measuring economic
performance in the economy of the reference region in the aggregate.
Based on the results of the analysis, all sectors have a shift towards developing and the
majority have a fairly high competitiveness at the provincial level. In addition, the mining and
quarrying sector will remain a potential sector, but with provisions that must be adjusted to the
provisions for the use and control of space, especially the CPO areas in Mandau and Sungai
Pakning Districts because there are several protected areas.
Meanwhile, based on the ability of per-sector competitiveness, only the primary and
secondary sectors have progressive competitiveness and have strong competitiveness, such as the
agricultural, mining, industrial, and trade and retail sectors. It is due to the high contribution and
aggregate value of each sector to the economy and investment in Bengkalis Regency. Thus, in the
future, not only the mining and quarrying sector will support the economy, but other competitive
and progressive sectors will also provide significant growth to the regional economy in the
aggregate in Bengkalis Regency. The following is a table of 6 economic sector shifts in Bengkalis
Regency:
Table 4. Sector Classification in Bengkalis Regency
Business Field
LQSS
Classification
LQ
SS
Agriculture, Forestry, and Fisheries
0,4
0,03
Developing
Mining and Quarrying
2,6
-0,04
Potential
Processing Industry
0,5
0,00
Developing
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Electricity and Gas Procurement
0,4
0,09
Developing
Water Procurement, Waste Management,
0,9
-0,03
Under-Developed
Construction
0,3
0,08
Developing
Large Trade and Retail; Repair
0,6
0,10
Developing
Transportation and Warehousing
0,3
0,01
Developing
Provision of Accommodation and Food and
Drink
0,5
0,00
Under-Developed
Information and Communication
0,4
0,12
Developing
Financial Services and Insurance
0,3
0,00
Developing
Real Estate
0,3
0,06
Developing
Company Services
0,6
0,11
Developing
Government Administration, Defense
0,5
0,00
Under-Developed
Education Services
0,5
0,09
Developing
Health Services and Social Activities
0,4
0,15
Developing
Other services
0,5
0,18
Developing
Source: Analysis Results, 2022
Table 5. Sector Shifts in Bengkalis Regency
Economic Sector
Economic Shift in Bengkalis Regency
KPP
KPPW
PB
Description
PB
Description of
KPP
Description of
KPPW
Agriculture,
Forestry, and
Fisheries
-0,02
0,04
0,03
Progressive
Specialization
in sectors that
are nationally
growing
slowly
Competitive
Mining and
Quarrying
-0,07
0,03
-0,04
Retreat
Specialization
in sectors that
are nationally
growing
slowly
Competitive
Processing Industry
0,00
0,00
0,00
Progressive
Specialization
in a nationally
fast-growing
sector
Not
Competitive
Electricity and Gas
Procurement
0,15
-0,06
0,09
Progressive
Specialization
in a nationally
fast-growing
sector
Not
Competitive
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2023
Water Procurement,
Waste Management
-0,06
0,03
-0,03
Retreat
Specialization
in sectors that
are nationally
growing
slowly
Competitive
Construction
0,09
-0,02
0,08
Progressive
Specialization
in a nationally
fast-growing
sector
Not
Competitive
Large Trade and
Retail; Repair
0,10
0,00
0,10
Progressive
Specialization
in a nationally
fast-growing
sector
Competitive
Transportation and
Warehousing
0,05
-0,04
0,01
Progressive
Specialization
in a nationally
fast-growing
sector
Not
Competitive
Provision of
Accommodation
and Food and Drink
0,02
-0,02
0,00
Retreat
Specialization
in a nationally
fast-growing
sector
Not
Competitive
Information and
Communication
0,12
0,00
0,12
Progressive
Specialization
in a nationally
fast-growing
sector
Competitive
Financial Services
and Insurance
0,02
-0,02
0,00
Progressive
Specialization
in a nationally
fast-growing
sector
Not
Competitive
Real Estate
0,04
0,02
0,06
Progressive
Specialization
in a nationally
fast-growing
sector
Competitive
Company Services
0,13
-0,03
0,11
Progressive
Specialization
in a nationally
fast-growing
sector
Not
Competitive
Government
Administration,
Defense
-0,02
0,01
0,00
Retreat
Specialization
in sectors that
are nationally
Competitive
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growing
slowly
Education Services
0,07
0,02
0,09
Progressive
Specialization
in a nationally
fast-growing
sector
Competitive
Health Services and
Social Activities
0,16
-0,01
0,15
Progressive
Specialization
in a nationally
fast-growing
sector
Not
Competitive
Other services
0,15
0,03
0,18
Progressive
Specialization
in a nationally
fast-growing
sector
Competitive
Source: Analysis Results, 2022
Economic Driving Sector of Bengkalis Regency Region Towards Domestic Investment and
Foreign Capital
Indicators of sectors driving the economy consist of (1) potential base sectors, (2) the average
pace of economic growth of ≥ 5.3 / year, (3) classified as developing sectors, (4) growth tends to
be progressive, (5) and specializes in sectors that are nationally fast-growing, and competitive. The
sectors driving the economy based on the criteria above are (1) the agriculture, forestry and
fisheries sector, (2) the trade and service sector, (3) the industrial sector, (4) the real estate sector,
and (5) other service sectors.
Each of the above criteria will be seen to have an effect on the realization value of investment
in Bengkalis Regency, both domestically and foreign. The following is table 8 of the realization
of the results of the value of domestic and foreign investment in Bengkalis Regency:
Table 6. Realization of the Value of Domestic and Foreign Investment in Bengkalis Regency
Year
PMA Realization Value
(Million US$)
Percentage
(%)
Realization Value of
PMDN (Billion Rupiah)
Percentage
(%)
2015
15,81
1,15
12,72
0,16
2016
23,69
3,67
205,11
2,06
2017
3,38
0,38
619,40
9,36
2018
113,13
10,65
308,12
28,69
2019
113,53
10,93
420,35
4,64
2020
152,79
14,77
4401,85
16,74
Source: Analysis Results, 2022
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2023
The Effect of Economic Driving Sectors on Domestic Investment
Basically, multiple regression analysis was carried out to see the influence of economic
driving sectors on the realization of the value of domestic investment. This is done to see what
sectors are able to become economic drivers of increasing domestic capital in the future. It is
necessary because, currently, the sector that brings the most investment in Bengkalis Regency
comes from the mining and quarrying sector. However, based on the results of the analysis, it can
be seen that in the future there will be a decrease in investment value (9.8%) due to current
problems in the mining and quarrying sector, namely (1) problems with mining areas located in
limitation areas, (2) reduced available oil reserves due to exploitation by companies, (3) the large
number of peatlands in Mandau and Rupat Districts that have not been detected by the dome
location, (4) exploitation of oil fields in Mandau District, Bukit Batu, Merbau, (5) management
that does not consider environmental aspects, (6) and problems in community mine management.
Thus, it is necessary to study other sectors that can also increase investment in Bengkalis Regency.
Based on the results of multiple regression analysis, the economic driving sectors that
influence the increase in domestic investment are (1) agriculture, forestry and fisheries with a value
of ß 1,846, (2) trade and services with a value of ß 2,932, (3) industry with a value of ß 3,417.
These three sectors have a significant influence on the growth of domestic investment in Bengkalis
Regency in the future. In addition, it is evident that the mining and quarrying sector is no longer
the main sector that attracts many investors in Bengkalis Regency due to the decreasing growth of
the sector every year and problems in managing and utilizing space. The following is table 9 of
the results of the analysis of the crusty sectors on the increase in domestic investment in Bengkalis
Regency:
Table 7. Economic Driving Sector for PMDN in Bengkalis Regency
Capital
Sector
Sig
R
Square
Regression
Equation
Information
Domestic
(Y1)
1) Trade and
Services
2) Industry
3) Agriculture,
Forestry and
Fisheries
0.000
0.000
0.000
1,000 or
100%
Y = 4,679 +
2,932 (Trade &
Services) +
3,417 (Industry)
+ 1,848
(Agriculture_Fo
restry_Fishery).
The significance of the
research results < 0.05
then H
i
accepted. This
means that the trade and
services, industry, and
agriculture sectors have a
significant influence
(100%) on future
domestic investment in
Bengkalis Regency
Source: Analysis Results, 2022
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Dependent Variable: PMDN
Table 8. Dependent Variable: PMDN
Model Summary
b
Model
R
R Square
Adjusted R
Square
Std. Error of
the Estimate
Durbin-
Watson
1
1.000
a
1.000
.
.
.846
a. Predictors: (Constant), Trade_and_Services, Industry, Services,
Agriculture_Forestry_Fishery
b. Dependent Variable: PMDN
From the table above, it can be seen that only 3 sectors affect domestic investment in
Bengkalis Regency, namely the trade and service sector, the industrial sector, and the agriculture,
forestry and fisheries sectors. The three sectors above do have a great influence on the growth of
domestic investment in Bengkalis Regency in the future because. It is supported by the trend of
the realization value of domestic investment in 2020 which is increasing in value.
In 2020, the realization value in the service trade sector was ranked 2
nd
with 1392 projects
worth ±Rp.732 billion. Then, in the industrial sector (Wood, textiles, food, chemical and
pharmaceuticals, minerals and metals, rubber, plastic) with 756 projects with a value of ±Rp. 9,487
billion, and the service sector with 249 projects worth ±Rp.786 billion. Thus, it can be concluded
that these 3 sectors are economic driving sectors that function in increasing domestic investment
in Bengkalis Regency in the future.
Effect of Economic Driving Sectors on Foreign Investment
Basically, an analysis of the development of the economic sector on foreign investment is
carried out to determine the expenditure or expenditure of investment to buy production goods,
and increase the ability to produce goods and services available in the economy derived from
foreign investment. Leading sectors are indispensable to attract many foreign investors to develop
businesses in order to increase production activities, and increase the amount of output and
regional economic income in Bengkalis Regency. The following is a table of 10 results of the
analysis of the crusting sectors on the increase in foreign investment in Bengkalis Regency:
Table 9. Economic Driving Sectors towards PMDN in Bengkalis Regency
Capital
Sector
Sig
R
Square
Regression
Equation
Information
Foreign
(Y2)
1) Trade and
Services
2) Real
Estate
3) Industry
0.000
0.000
0.000
0.000
1,000
or
100%
Y = -2,979 + 1,540
(Trade & Services)
+ 2,350 (Real
Estate) + 1,540
The significance of the
research results < 0.05 then
H
i
accepted. This means
that the trade and service
sector, real estate, industry
A Study of Economic Driven Sectors to Increase the Domestic and Foreign Investment
2270 | I n d o n e s i a n J o u r n a l o f M u l t i d i s c i p l i n a r y S c i e n c e , 2 ( 4 ) , J a n ,
2023
4) Other
Services
(Industry) + 0.680
(Other Services).
and other services have a
significant influence
(100%) on foreign
investment in the future in
Bengkalis Regency
Source: Analysis Results, 2022
Dependent Variable: PMA
Table 10. Dependent Variable: PMA
Model Summary
b
Model
R
R Square
Adjusted R
Square
Std. Error of
the Estimate
Durbin-
Watson
1
1.000
a
1.000
.
.
.256
a. Predictors: (Constant), Perdagangan_dan_Jasa, Real_Estate, Industri,
Jasa_Lainnya
b. Dependent Variable: PMA
From the table above, it can be concluded that the economic driving sectors that affect the
increase in foreign investment in the future in Bengkalis Regency are the trade and services sector
with a value of ß 1,540, the real estate sector with a value of ß 2,350, the industrial sector with a
value of ß 1,540, and other service sectors with a value of ß 0.680. These four sectors have a
considerable realization value for increasing foreign capital and production output in Bengkalis
Regency.
Based on the trend of realizing the value of foreign investment in Bengkalis Regency in 2020,
the trade and services sector was ranked 5
th
with 68 projects worth US$ 831,000 which indicates
that the trade and services sector will remain a sector that is one of the sources of foreign capital
withdrawal in Bengkalis Regency. Then, the real-estate sector was ranked 8
th
with 42 projects with
a value of US$ 4,080 which indicates that the sector in the field of housing, industrial estate
development, and offices will increase in number due to regional economic development policies
in urban and border areas. In addition, the industrial sector is ranked 1
st
with 447 projects worth
US$ 745,327.9. The mainstay areas of industrial activities are in the urban pakning river, and the
urban duri which functions as the center of the industrial area, as well as factories spread across
several districts in Bengkalis Regency. The agriculture, fishery, oil palm plantations, rubber,
coffee, and tobacco industries are one of the regional development directions that can attract many
foreign investors to invest in Bengkalis Regency. Meanwhile, other service sectors also have the
potential to attract many investors for tourism development activities, especially on Rupat Island
which has deep landscapes and exotic and interesting beaches to visit. The existence of a policy of
developing the outer islands or in the border area provides its own advantages for Rupat Island,
because of its strategic location as one of the leading islands in the Malacca Strait shipping lane
A Study of Economic Driven Sectors to Increase the Domestic and Foreign Investment
2271 | I n d o n e s i a n J o u r n a l o f M u l t i d i s c i p l i n a r y S c i e n c e , 2 ( 4 ) , J a n ,
2023
and worthy of developing the western gate of the archipelago (Athlantic Gate), and as one of the
National Tourism Development Areas (KPPN, Kawasan Pengembangan Pariwisata Nasional).
CONCLUSION
The role of investment in regional economic development in Kabuaten Bengkalis is strongly
influenced by the existence of primary, secondary, and tertiary sectors. Meanwhile, the
development of domestic investment in Bengkalis Regency is influenced by 3 sectors, namely
trade and services (ß 2,932), industry (ß 3,417), and agriculture, forestry and fisheries (ß 1,846).
These three sectors have a very important role in the development of domestic capital, because
these sectors have a 100% Asym.sig value for the sustainability of domestic investment in
Bengkalis Regency.
Meanwhile, there are 4 sectors that affect foreign investment, namely (1) the trade and
services sector (ß 1,540), (2) the real estate sector (ß 2,350), (3) industry (ß 1,540), and other
services ß (0.680). Based on the trend of FDI realization value, it can be seen that the majority of
foreign investment projects in Bengkalis Regency are in these 4 sectors, with a total investment of
±US$ 6 thousand. Thus, it can be concluded that sectors such as trade and services, industry, real
estate, agriculture, and other services are sectors that will drive the regional economy and bring in
a lot of investment in Bengkalis Regency in the future. The suggestion for the next research is to
analyze the superior potentials and the cycle of sector movements (input-output) to investment
growth in Bengkalis Regency.
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