Infrastructure, Investment, and Environmental Degradation: A Study of Economic Development in West Sumatra

Abstract

This study investigates how infrastructure, investment, agriculture, trade and industry influence economic growth and environmental degradation in West Sumatra Province. The research was conducted with a quantitative approach in West Sumatra Province, using time series data for research variables from 2011-2020. Data analysis includes descriptive and inferential analysis as well as testing the assumptions of normality, multicollinearity and autocorrelation using Eviews. These findings demonstrate the significant impact of infrastructure on agriculture and trade, as well as investment in agriculture. However, the investment did not show a significant impact on the industry. Likewise, agriculture significantly influences economic growth and environmental degradation, while trade and industry show mixed impacts. This research recommends that stakeholders prioritize infrastructure development to pave the way rather than foreign and domestic investment, because infrastructure development can improve the quality of the environment while investment reduces the quality of the environment. Apart from that, efforts are needed to increase trade and industrial development. Apart from strengthening the positive influence of infrastructure on environmental quality, it will also weaken the negative influence of investment on environmental quality.