Abstract:
South Kalimantan’s regional economy remains strongly dependent on the mining and quarrying sector, raising concerns about growth persistence and structural dependence. While numerous studies have examined regional economic growth, they predominantly relied on static panel models that fail to capture dynamic adjustments and potential endogeneity issues inherent in macroeconomic. The objective of this research is to analyze the dynamic relationship between exogenous variables and economic growth in South Kalimantan, while addressing gaps in previous research. The method employed in this study is the Arellano–Bond Generalized Moments Method (GMM), using balanced panel data from 12 regencies/cities in South Kalimantan over the period 2017–2025. The results indicate that lagged economic growth, the mining and quarrying sector, and realized investment significantly and positive effect on regional economic growth. The short-run elasticity further indicates that mining and quarrying generate a stronger growth response than realized investment, confirming the continued dominance of extractive activities in the regional economy. These findings imply that South Kalimantan’s growth is dynamic but remains structurally dependent on resource-based sectors. Therefore, regional governments should optimize mining contributions through stronger environmental governance, accelerate economic diversification, improve investor-related public services, and strengthen linkages between investment, local labor absorption, and MSME development.
