HOW TO INCREASE ECONOMIC DEVELOPMENT WITH THE ROLE OF HUMANS AND PROSPEROUS FAMILIES: A STUDY OF EAST KALIMANTAN PROVINCE

Abstract

A prosperous economy brings harmony to economic development. This study aims to determine the mediating role of human development and prosperous families on the external environment and economic development in East Kalimantan, Indonesia. Quantitative panel data from the Central Statistics Agency of East Kalimantan Province includes 117 data on six districts and three cities during the period 2007 to 2019, with an equation structure model (SEM) through the software WarpPLS. The direct influence between exogenous variables on the mediator variable found a positive or negative and significant influence of poverty, education, population and labor on human development and performance. Meanwhile, the direct influence of the exogenous variables on Economic Development was found to have positive and negative effects, both significant and insignificant. It was also found that the influence of the Human Development mediator variable on the endogenous variable of Economic Development was positive and significant. In contrast, the effect of the prosperous family variable on Economic Development was negative and significant. Then the influence of Human Development on the prosperous family was negative and significant. This research contributes to theoretical and empirical studies where it is found that there is an influence between variables that becomes a gap in the findings of the new research. All indirect effects of exogenous to endogenous variables through the mediation of Human Development and prosperous families are not entirely significant.