Economic and Tourism Factors Affecting the Real Gross Regional Domestic Product: A Case Study
Purpose: This study aims to investigate the relationship between Foreign Direct Investment (FDI), Domestic Investment (DI), Employment (EMP), and Number of Tourists to real Gross Regional Domestic Product (real GRDP) of the Special Region of Yogyakarta or Daerah Istimewa Yogyakarta (DIY). Design/methodology/approach: This research uses panel data modeling for the period of 2007-2019. Findings: The results show that partially DI and the number of tourists have significant positive effects on real GRDP in the region. On the other hand, EMP has significant and negative effect on real GRDP while FDI has not significant effect on real GRDP. Practical implications: Policy recommendation for government as an implication of this study to improve real GRDP of the Special Region of Yogyakarta is (a) improving the quality of education and skill of labor; (b) improving domestic investment incentive policies for local investors; (c) improving the investment climate to encourage the entry of right FDI on productive economic sectors; and (d) increasing the number of tourists arrivals in DIY through promotion and improving services in all sectors for tourists. Originality/value: Domestic Investment and number of tourists have an important role in pushing for the improvement on the real Gross Regional Domestic Product of the Special Region of Yogyakarta. Synergizing economic factors and tourism in deciding for policies can accelerate economic growth.