Determinants of Investment Realization in Indonesia: The Role of Financial Deepening, Human Capital, and Credit Intermediation
DOI:
https://doi.org/10.30741/assets.v10i2.1941Keywords:
Investment Realization, Financial Deepening, Human Capital, Credit Intermediation, PolicyAbstract
This study examines the structural determinants of macroeconomic investment realization in Indonesia over ten years (2013–2022), capturing a shock-prone decade marked by commodity cycles and the COVID-19 pandemic. While prior literature often isolates monetary liquidity or social development, this paper fills a critical research gap by integrating aggregate liquidity (Financial Deepening), social infrastructure (Human Capital), and direct private financing (Credit Intermediation) into a unified framework. Methodologically, we employ an Ordinary Least Squares (OLS) log-linear regression model to evaluate annual macroeconomic time-series data. The empirical results reveal that Human Capital, proxied by the Human Development Index (HDI), exerts a dominant and statistically significant multiplier effect on investment realization (β2 = 6.85, p < 0.05). Similarly, Investment Credit Intermediation shows a robust positive influence. Conversely, Financial Deepening (M2/GDP) is statistically insignificant, indicating a structural bottleneck in which expanded broad money fails to efficiently transmute into real-sector capital accumulation. These findings provide a novel empirical contribution by demonstrating that investment attractiveness in emerging markets relies heavily on structural absorptive capacity rather than mere monetary expansion.
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