The impact of horizontal strategy, resource efficiency and business facilitation in tourism foreign direct investment towards local economic growth in North Sumatra, Indonesia

• Main Author: Parhimpunan Simatupang
• Format: Thesis
• Language: English; English
• Published: 2022
• Subjects: G154.9-155.8 Travel and state. Tourism; HC94-1085 By region or country
• Online Access: https://eprints.ums.edu.my/id/eprint/40525/1/24%20PAGES.pdf; https://eprints.ums.edu.my/id/eprint/40525/2/FULLTEXT.pdf; https://eprints.ums.edu.my/id/eprint/40525/
• Institution: Universiti Malaysia Sabah

This research investigates tourism foreign direct investment in North Sumatra, Indonesia. The key factors influence the investment decision in the tourism sector by use of horizontal strategy (also called a market-seeking), resource and efficiency strategy and business facilitation (also called a vertical strategy). It also examines how the existing investment in North Sumatra tourism has an impact on economic growth in North Sumatra which can still be said to be far from the enormous tourism potential. The research used multy methods with qualitative and quantitative approaches. Quantitative data obtained by surveying 250 respondents who are tourism services providers including tourism and hospitality business sector-accommodation and restaurants (178 respondents), travel agents and tours operators (62 respondents) and tourist guide services (10 respondents). Quantitative data analysis method used in this research is multiple regression. It also added the interview from 4 key informants, to get data from the government’s point of view and can be verification of quantitative data findings from agencies/institutions related to tourism in North Sumatra. The results of this research show that the three variables, namely horizontal strategy, resource efficiency strategy, also business facilitation have a positive and significant effect on tourism foreign direct investment. This research also proves that the economic growth factor influenced by the presence of tourism foreign direct investment. Meanwhile, the results of the survey and the interview, show that the increase in the quality of human resources and the quality of company management is an indicator of economic growth that is most affected by the existence of tourism foreign direct investment. This research shows that the results support or strengthen the theory of investment, mainly foreign direct investment which has an impact on economic growth. For the government of North Sumatra, this research can be used as a consideration for evaluating policies on investment in tourism. Future research would be better if we add comparators for two regions that have different conditions of tourism potential and other per capita income. It will provide an overview of the weaknesses and strengths in the development of tourism in the area and its impact on economic growth.