The Analysis of Regional Investment Model for Improving Development: The Case of Bungo District

This study aimed to determine the scale of local investment with incremental capital output ratio (ICOR) approach and to analyze the factors influenced private investment and their impact on economic development in Bungo District. The ICOR model was used to answer the purpose of the first research question, a multiple regression model was used to answer the purpose of the second research question, and simple regression model was used to for the purpose of the third research question. The finding showed that the average amount of investment in Bungo District for the last 5 years was Rp 0.905 trillion with an accumulated ICOR of 1.0992 and an average ICOR of 1.2360. Capital and resource expenditure factor. It was a very significant factor affected private investment in Bungo District at P <0.05. Meanwhile, local investment also had significant and positive impacts on economic development represented by PDRB. From the findings, it is suggested to the government of Bungo District to increase capital expenditure especially basic infrastructure and economy expenditure and human resource competence improvement. Besides, it is also necessary to provide incentives and promotions to potential private investors attracting interest to invest in Bungo District, Sumatra, Indonesia.