Public capital investment represents the role of state and local
governments in supporting greater capacity of private enterprises to
gain success in a market economy measured by revenue growth. Medium
enterprises are considered as the catalysts for economic growth and
competitiveness particularly in developing countries due to efficiency
and flexibility in an adverse economic environment. Using aggregate data
of 30 states (provinces) in Indonesia from 1997-2002, the impact of
public capital investment on the revenue growth of medium enterprise is
examined. The paper finds that only medium enterprises in the industrial
and trading sector benefited from public capital investments and the
most optimum capital investment is in transport infrastructure.