The Effects of Investment Amount in Investment Activity Report (Laporan Kegiatan Penanaman Modal/LKPM) on Employment in West Java Province

Abstract

This study aims to determine the contribution of capital expenditure from industries on the employment rate in West Java, Indonesia. Capital expenditure from the private sector is always assumed to positively affect the employment rate because the number of investment realization signifies workforce requirement; however, with rapid technological advancement and changes in the social and business environment, does it still reflect the real situation? The main source of data is taken from the Investment Activity Report or Laporan Kegiatan Penanaman Modal (LKPM), which is a report on the growth of a company’s investment realization and the issues encountered by businesses that are submitted regularly to Badan Koordinasi Penanaman Modal/Kementerian Investasi (Indonesia Investment Coordinating Board/Ministry of Investment) or BKPM. LKPM submission is regulated by BKPM Regulation 7/2018, and the purpose of this study is to observe investment realization growth and foster communication between BKPM and businesses. This study is carried out by evaluating LKPM data from companies in the manufacturing industry that conduct their business in West Java Province and comparing it against the employment rate in West Java Province to find out the effects of investment realization on the employment rate. This study finds that there is an effect of all independent variables on the dependent variable. If the conclusion is drawn, there is an influence between the workforce on the investment amount in 2018.

Citation

Puspitadewi, T. and Faturohman, T. (2023), "The Effects of Investment Amount in Investment Activity Report (Laporan Kegiatan Penanaman Modal/LKPM) on Employment in West Java Province", Barnett, W.A. and Sergi, B.S. (Ed.) Comparative Analysis of Trade and Finance in Emerging Economies (International Symposia in Economic Theory and Econometrics, Vol. 31), Emerald Publishing Limited, Leeds, pp. 191-202. https://doi.org/10.1108/S1571-038620230000031025