The Impact of Nickel Downstreaming on Economic Growth in East Luwu Regency for the 2018–2024 Period
DOI:
https://doi.org/10.37899/mjde.v3i1.328Keywords:
Nickel Downstreaming, Regional Economic Growth, Resource-Based IndustrializationAbstract
Indonesia’s nickel downstreaming policy has been widely promoted as a strategic instrument to enhance value added and stimulate economic growth, yet its regional economic impacts remain insufficiently explored. This study analyzes the impact of nickel downstreaming on economic growth in East Luwu Regency, one of Indonesia’s major nickel-producing regions, over the 2018–2024 period. Using a quantitative time-series approach, regional economic growth is measured by the growth rate of Gross Regional Domestic Product (GRDP) at constant prices, while downstreaming is proxied by the contribution of mining and processing activities and investment in the nickel industry. The empirical analysis indicates that nickel downstreaming has played a significant role in driving regional economic growth, primarily through increased value added and capital accumulation. However, the growth pattern is predominantly capital-intensive, with limited employment spillovers and a strong dependence on the nickel sector. These findings suggest that while downstreaming has been effective in accelerating regional output, its capacity to generate inclusive and diversified growth remains constrained. The study contributes to the literature on resource-based industrialization by providing subnational evidence and highlights the importance of complementary policies to strengthen local linkages and long-term regional economic resilience.
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