Bulan Prabawani

Diponegoro University,

Semarang, Indonesia

E-mail: bulan@live.undip.ac.id

ORCID 0000-0001-7213-5770

Central Java regional competitiveness: The impacts of production factor, corruption, regulation, and infrastructure

Sudharto P. Hadi

Diponegoro University,

Semarang, Indonesia

E-mail: sudhartophadi@lecturer.undip.ac.id

Nurul R. Hapsari

UPN Veteran,

Surabaya, Indonesia

E-mail: nurul.retno.nr@gmail.com

Abstract. National and regional competitiveness have become important elements for determining investment and regional resilience. A number of indices have been developed as references to determine a sustainable business target. Studies in this direction have also been carried out using various methods, but the majority of them used secondary data, applied different variables, and were not from the perspective of business actors. This research therefore analyzes the influence of production factors, regulation, corruption perception, and infrastructure on the business environment in Central Java, Indonesia, which is a decentralized country. This study applied competitiveness pillars used by the World Economic Forum (WEF) and offered a quantitative approach by carrying out a survey of 1506 companies across various sectors and sizes. Using analysis of moment structures (AMOS) and also robust covariance analysis method, this research has found that even though the city/regency competitiveness is high, there is no significant effect between production factors, regulation, corruption perception, and infrastructure on business environment in the context of regional competitiveness. This proves that primary and secondary data can provide different results and need to complement each other when assessing regional competitiveness.

Received: January, 2020

1st Revision: September, 2020

Accepted: December, 2020

DOI: 10.14254/2071-789X.2020/13-4/2

JEL Classification: R1, O1, I5

Keywords: regional competitiveness, production factor, regulation, corruption, business environment, Central Java