FACTORS AFFECTING ECONOMIC GROWTH OF THE SOUTHWEST KEY ECONOMIC REGION

Abstract

This study seeks to comprehend the influencing factors on the economic growth of the pivotal economic region in the Southwest. The authors conducted research based on the dataset from four provinces and cities in the region during the period 2005-2022, employing panel data estimation methods such as OLS pooled regression, fixed effects (FEM), and random effects (REM). REM was identified as the most optimal after rigorous testing and comparison of these models. The research results indicate that, among the six factors analyzed, which include Labor, Investment Capital, Public Expenditure, Education, Foreign Direct Investment, and Unemployment Rate, only Public Expenditure and Foreign Direct Investment have an impact on the economic growth of the region. These outcomes serve as the foundational basis for provinces and cities within the key economic areas to concentrate on enhancing policies related to the utilization of investment capital, fostering international trade, attracting foreign direct investment, and elevating workforce quality.