Multi Method Analysis of Economic Growth Targets and Business Sector Realities

Abstract

This study examines the structural gap between government-set economic growth targets and actual business sector performance in Indonesia (2018–2023), employing a three-phase multi-method analytical framework with 240 business owners and managers across six economic sectors. Phase 1 econometric decomposition revealed that government GDP growth targets exceeded actual growth in five of six years, with a mean annual deviation of 0.43 percentage points; human capital investment contributed 0.31 percentage points less than projected, while total factor productivity (TFP) variance increased by 38%, indicating accelerating structural instability. Phase 2 behavioral survey analysis via structural equation modeling (SEM) confirmed that regulatory risk perception exerts a significant negative indirect effect on investment intent (standardized path coefficient = −0.41, p < 0.001), fully mediated through business confidence (BCI), with manufacturing and construction recording the largest confidence gaps of −2.7 points on a 10-point scale. Institutional Trust Inventory (ITI) scores revealed a significant negative correlation between business tenure and institutional trust (r = −0.38, p < 0.001), operationalizing “industry fatigue” as a cumulative drag on investment readiness. Phase 3 System Dynamics simulation identified an institutional trust bifurcation threshold at ITI = 4.2, below which the growth–confidence feedback system shifts to a self-reinforcing stagnation regime; manufacturing (ITI = 3.8) and construction (ITI = 3.6) operate below this threshold. Sensitivity analysis found institutional trust erosion elasticity (1.34) to be 4.8 times more influential on target realization than growth target magnitude (0.28). The study concludes that sustainable growth target achievement requires policy designs prioritizing institutional trust-building and regulatory consistency alongside technical economic planning.