Analysis of the capital per labor ratio to the growth of gross regional domestic product in Badung Regency of Bali in Indonesia

Economic Annals-XXI: Volume 215, Issue (5-6), Pages: 70-75

Citation information
Tingkes, I. N., Junaedi, I. W. R., Widnyani, I. A. P. S., & Sumartana, I. M. (2025). Analysis of the capital per labor ratio to the growth of gross regional domestic product in Badung Regency of Bali in Indonesia. Economic Annals-XXI, 215(5-6), 70-75. doi: https://doi.org/10.21003/ea.V215-12

I Nyoman Tingkes
PhD (Management),
Faculty of Business and Tourism,
Dhyana Pura University
94 Raya Padang Luwih Str., Dalung, Kec. Kuta Utara, Kabupaten Badung, Bali, 80351, Indonesia
nyomantingkes@undhirabali.ac.id
ORCID ID: https://orcid.org/0009-0001-9608-0273
Corresponding author

I Wayan Ruspendi Junaedi
PhD (Management),
Faculty of Business and Tourism,
Dhyana Pura University
94 Raya Padang Luwih Str., Dalung, Kec. Kuta Utara, Kabupaten Badung, Bali, 80351, Indonesia
ruspendijunaedi@undhirabali.ac.id
ORCID ID: https://orcid.org/0000-0001-7131-3563

Ida Ayu Putu Sri Widnyani
PhD (Public Administration),
Faculty of Social & Political Sciences,
Ngurah Rai University
30 Jl. Kampus Ngurah Rai Str., Bali, 80238, Indonesia
dayusriwid@unr.ac.id
ORCID ID: https://orcid.org/0000-0001-8974-6287

I Made Sumartana
PhD (Economics),
Faculty of Economics and Business,
Ngurah Rai University
30 Jl. Kampus Ngurah Rai Str., Bali, 80238, Indonesia
sumartana63@gmail.com
ORCID ID: https://orcid.org/0009-0004-0194-4852

Analysis of the capital per labor ratio to the growth of gross regional domestic product in Badung Regency of Bali in Indonesia

Abstract. The purpose of this study is to determine the ratio of capital to labor and the incremental capital-output ratio (ICOR) between investment and gross regional domestic product or (GRDP) of Badung Regency for five years of 2020-2024. Quantitative data were analyzed using descriptive statistical analysis techniques and the Harrod-Domar model. The results of the study show that:

a) the ratio of capital to labor is USD 2,280;
b) the ICOR value of 4.14 consists of the ICOR of domestic investment of 2.94, the local government of 0.24, and the foreign investment of 1.61; and
c) non-linear labor absorption, both with investment growth and GRDP growth in the same period.

The results of our study show that economic growth in Badung Regency of 41.14% is determined by investment. This means that the efficiency of investment performance in Badung Regency is in the high category, while the rest, which is 58.86%, is determined by consumption, government spending, and net export-imports. However, it was not researched on this occasion. Based on the results of these findings, it can be recommended that to increase GRDP, it can be done by increasing the ratio of capital to labor.

Keywords: Investment; Workforce; Capital to Labor Ratio; GRDP; Performance; Badung; Bali; Indonesia; Labor; Incremental Capital-Output Ratio; COR; Incremental Capital-Output Ratio; ICOR

JEL Classifications: Е24; Е41; Е64; I18; J28; J31

Acknowledgements and Funding: The authors received no direct funding for this research.

Contribution: The authors contributed equally to this work.

Data Availability Statement: The type of data used is quantitative data sourced from the One-Stop Integrated Services Investment Office, the Regent’s Accountability Report, and the Badung Central Statistics Agency of Indonesia. The dataset is available from the authors upon request.

DOI: https://doi.org/10.21003/ea.V215-12

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Received 20.04.2025
Received in revised form 2.05.2025
Accepted 11.05.2025
Available online 27.06.2025