Citation:

Nurina Awanis, Dr. Edy Santoso, S.E., M.Sc., Dr. Endah Kurnia Lestari, S.E., M.E. "The Effect of Population Density and Forest Area on Regency/City GRDP in East Java Province in 2020–2024" International Research Journal of Economics and Management Studies, Vol. 5, No. 1, pp. 98-103, 2026. Crossref. http://doi.org/10.56472/25835238/IRJEMS-V5I2P112

Abstract:

Gross Regional Domestic Product (GRDP) is a key indicator reflecting regional economic performance and a region's ability to manage its resources. Differences in demographic characteristics and environmental conditions across regions contribute to uneven development of GRDP in districts/cities, particularly in East Java Province, which has a highly diverse economic structure and land cover. Population density has the potential to drive economic activity through agglomeration effects, while the presence of forest land presents a dilemma between economic interests and environmental sustainability. Based on these conditions, this study aims to analyze the effect of population density and forest land area on GRDP in districts/cities in East Java Province during the 2020–2024 period. The study used balanced panel data covering 38 districts/cities with a total of 190 observations. The analytical method used was panel data regression using the Common Effect Model (CEM), Fixed Effect Model (FEM), and Random Effect Model (REM) approaches. The best model was selected using the Hausman test. The analysis results indicated that the Fixed Effect Model was the most appropriate. Partially, population density did not significantly affect GRDP after controlling for region-specific characteristics. Conversely, forest area has a negative and significant effect on the GRDP of regencies/cities in East Java Province. This finding confirms that differences in economic structure and regional characteristics play a dominant role in determining regional economic performance. The implications of this research demonstrate the importance of formulating regional economic development policies that are not solely oriented toward increasing output but also consider environmental sustainability and the specific advantages of each region.

References:

[1] Barbier, E. B. (2019). The concept of natural capital. Oxford Review of Economic Policy, 35(1), 14–36. https://doi.org/10.1093/oxrep/gry028 [2] Grossman, G. M., & Krueger, A. B. (1995). Economic growth and the environment. Quarterly Journal of Economics, 110(2), 353–377. [3] Fujita, M., & Thisse, J. F. (2002). Economics of agglomeration: Cities, industrial location, and regional growth. Cambridge: Cambridge University Press. [4] Marshall, A. (1890). Principles of economics. London: Macmillan. [5] Todaro, M. P., & Smith, S. C. (2015). Economic development (12th ed.). New York: Pearson Education.

Keywords:

Forest Land, GRDP, Panel Data Regression, Population Density.