Journal of Socioeconomics and Development. 2022. 5(1): 1-12 Journal of Socioeconomics and Development https://publishing-widyagama.ac.id/ejournal-v2/index.php/jsed The impact of electricity investment on inter-regional economic development in Indonesia: An Inter-Regional Input- Output (IRIO) approach Albertus Girik Allo 1 *, Inayati Nuraini Dwiputri 2 , and Marcus Maspaitella 1 1 Papua University, Indonesia 2 Universitas Negeri Malang, Indonesia *Correspondence email: ag.allo@unipa.ac.id INTRODUCTION The trend of electricity consumption in Indonesia has progressively increased in recent years. According to the Central Bureau of Statistics, per capita consumption of electricity grew gradually from 0.91 MWH in 2015 to 1.08 MWH in 2019 (BPS, 2021). Nowadays, electricity is considered as one of the energy sources that is utilized in generating economic activities of the Indonesian people. Economic activities related to production of goods and services are mostly powered by electricity as their energy sources. Therefore, the utilization of electricity is still considered having significant contributions to the improvement of economic development (Chakravorty et al., 2016; Khandker et al., 2014; Van de Walle et al., 2017). Moreover, it is an undeniable fact that the increase of electricity consumption is also supported by the investment in the electricity sector. In addition, the increasing trend of electricity utilization has also encouraged various researches on the identification of To cite this article: Allo, A. G., Dwiputri, I. N., & Maspaitella, M. (2021). The impact of electricity investment on inter- regional economic development in Indonesia: An Inter-Regional Input-Output (IRIO) approach. Journal of Socioeconomics and Development, 5(1), 1-12. https://doi.org/10.31328/jsed.v5i1.2775 ISSN 2615-6075 online; ISSN 2615-6946 print ©UWG Press, 2022 ABSTRACT Electricity is a development priority for low and middle income countries, including Indonesia, especially in the households living in suburban and rural areas. By 2020, Indonesia's electrification ratio has reached 96.71%. However, there were 433 villages that did not have electricity, most of which were located in eastern Indonesia (Papua, West Papua, East Nusa Tenggara, and Maluku). Investment in the electricity sector will drive regional economic growth. This research attempts to figure out the impact of investment in electricity on economy. This study used Indonesian inter-regional Input-Output data. The method used in this study was the Interregional Input-Output (IRIO) model. The analysis shows that electricity impacted not only the territory being built but also other regions in Indonesia. Electricity industry investment in Indonesia have been able to provide a multiplier effect on the economy as many as 3.11. Java region gets the greatest benefit from electricity development in Indonesia. This was rationally acceptable due to the fact that most of the industry was located in this region. This causes a development gap between Java and outside Java. It is necessary to accelerate reallocate several national strategic industries on various islands in Indonesia based on the advantages of each region and to strive for areas that are still "dark" to have electricity. ARTICLE INFO ►Research Article Article History Received 14 September 2021 Accepted 3 December 2021 Published 31 January 2022 Keywords electricity; investment; Interregional Input-Output (IRIO) model; multiplier effect; regional development JEL Classification E22; L94; R15