International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

The Effect of Social Capital on Indonesian Economic Growth Period 1983 – 2008
Y. Sri Susilo, Lincolin Arsyad

This research aims to identify and analyze the effect of social capital on the economic growth in Indonesia. The social capital in this case is approached with government debt, unemployment, and average real wages variable. In this research there is another independent variable that is the export variable. Economic growth variable used is Gross Domestic Product (GDP) growth variable. Data used is secondary data with observation period 1983-2008. Model and analysis tool used is Error Correction Model (ECM) econometric model. The result of the estimation by ECM model is in the short term social capital variable (government debt) has negative and significant effect on the economic growth. Whereas other social capital in the model (unemployment and average real wages) doesn’t have any effect on the economic growth. However, in long term, social capital variable (government debt and average real wages) each has positive and significant effect on the economic growth, while the unemployment variable has negative and significant effect on the economic growth. To the export variable, it has positive and significant effect, both in the short and long term.

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