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

Summary/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.

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