Explaining Regional Economic Growth in South Sulawesi: The Role of HDI and Unemployment in a Panel Data Framework

Abstract

This study aims to analyse the determinants of economic growth in districts/cities in South Sulawesi Province during the period 2020–2024. The independent variables analysed include population size, unemployment rate, poverty rate, and Human Development Index (HDI). This study uses a quantitative approach with static panel data analysis methods on 24 districts/cities. The selection of the best model was carried out through the Chow test and the Hausman test, which showed that the Fixed Effects Model (FEM) was the most appropriate model. To ensure the reliability of the estimates, robust standard errors were used to overcome potential autocorrelation. The results show that the unemployment rate has a negative and significant effect on economic growth, while the HDI has a positive and significant effect. Conversely, population size and poverty rate did not show a significant effect on regional economic growth. These findings indicate that the quality of human resources and labour market conditions play a more decisive role than quantitative demographic factors alone. Therefore, regional development policies need to focus on improving human quality and creating productive jobs to promote inclusive and sustainable economic growth in South Sulawesi Province.