Are There Effects of the Investment Spillover in Central Sulawesi?

Abstract

Purpose: This study analyzes the effect of FDI on the Gross Regional Domestic Product (GRDP) performance of provinces in Sulawesi Island during the 2014-2019 period. Methodology/Approach: The time span of this research was chosen as a relative approach to the initiation of One Belt One Road (OBOR) Initiatives or now known as Belt and Road Initiatives (BRI) which invested heavily in Central Sulawesi Province. This proves that the presence of foreign investment in Sulawesi Island can be expected to advance the regional economy. Findings: The estimation results of the Granger Causality Test (GCT) indicate that there is a spillover effect of economic growth in Central Sulawesi Province on the economic growth of other provinces in Sulawesi Island. Originality: This research provides a strong signal that economic activity in Central Sulawesi Province may have implications for the dynamics and performance of the economy in the surrounding provinces.