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Is There A Causality Relationship Between Law Enforcement, Crime Rates, And Economic Growth? An Empirical Evidence From Western Indonesia

Author

Listed:
  • Syarifuddin HASYIM

    (Senior Lecturer, Faculty of Law, Universitas Syiah Kuala, Banda Aceh, Indonesia)

  • Muhammad ZULHILMI

    (Senior Lecturer, Faculty of Islamic Economics and Business, Universitas Islam Negeri Ar-raniry, Banda Aceh, Indonesia)

  • Khairul AMRI

    (Lecturer, Faculty of Islamic Economics and Business, Universitas Islam Negeri Ar-raniry, Banda Aceh, Indonesia)

Abstract

The economic impact of law enforcement and crime rates empirically has not been widely revealed by researchers. In fact, in general, economic activities can be related to security factors. This study analyzes the influence of law enforcement and crime on economic growth. Using a panel data set of 8 provinces from western Indonesia during the period 2006-2017, the study found that there were no long-run relationships between the three variables. In the short-run, law enforcement and crime rates have a positive and significant effect on economic growth. Law enforcement has a significant and negative effect on crime rates, and vice versa crime rates have a positive and significant effect on law enforcement. The results of the Granger causality test indicate the existence of bidirectional causality between crime rates and law enforcement and between law enforcement and economic growth. Furthermore, unidirectional causality exists running from crime to economic growth.

Suggested Citation

  • Syarifuddin HASYIM & Muhammad ZULHILMI & Khairul AMRI, 2019. "Is There A Causality Relationship Between Law Enforcement, Crime Rates, And Economic Growth? An Empirical Evidence From Western Indonesia," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(3), pages 95-109, December.
    • Handle: RePEc:hrs:journl:v:xi:y:2019:i:3:p:95-109
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    Cited by:

    1. Natalia V. TRUSOVA & Oleksandr S. PRYSTEMSKYI & Oksana V. HRYVKIVSKA & Alina Zh. SAKUN & Yurii Y. KYRYLOV, 2021. "Modeling Of System Factors Of Financial Security Of Agricultural Enterprises Of Ukraine," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(1), pages 169-182, June.

    More about this item

    Keywords

    Economic Growth; Law Enforcement; Crime Rates; Panel Vector Autoregressive; and Granger Causality Test;
    All these keywords.

    JEL classification:

    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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