32 research outputs found

    Diterminants of Tourism Demand in Indonesia: A Panel Data Analysis

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    By 2014 Indonesia registered 11.6 million inbound foreign tourists, 135% higher than the year 2000. Since then, government policies to promote tourism flourished. This article investigates the determinants of inbound tourism from the top nine mayor tourist origin countries into Indonesia covering the period of 2000 to 2014. This research employs a dynamic panel dataset to estimate the impact of per capita real income, relative prices, accommodation capacity, distance, and public infrastructure investment on international tourism demand in Indonesia, capturing demand- and supply-side effects. The results show that per capita income of tourists, relative price, and available rooms have a positive effect on tourism expenditure in Indonesia, while distance has a negative effect. Dummy variables capture large negative shocks in tourism arising from two terrorist attacks in 2002 and 2005, as well as from the global financial crisis in 2008. Income plays a positive but low impact on tourism demand compared to other nations. The positive effect of prices suggests an advantage of Indonesia in competitive tourism prices. Nevertheless, low prices also denote low value in tourism services. The substantial impact of accommodation may indicate that significant effects of tourism are allocated in lodging, minimizing the impact on other sectors

    Covid-19 dan Dampaknya Terhadap Kinerja Bank BUMN di Indonesia

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    Covid-19 has increased the risk of financial institutions. As countries struggle to strengthen economic activity and provide various fiscal stimuli to facilitate liquidity in the market, this study questions whether national banks are still in a healthy condition to face uncertainties in the market. This study applies the RGEC (Risk Profile, Good Corporate Governance, Earnings, and Capital) approach to assess the performance of state-owned banks in Indonesia during the new normal period since June 2020 (quarter II and III). Based on the analysis and discussion of this study, it can be concluded that the condition of state-owned banking in Indonesia during the new normal period was still healthy. Bank risk level remains at a safe level. Bank made huge profits and fixed capital is still at a healthy level. Thus, state-owned banks remain competitive and handle risk well. This is supported by the existence of stimulus assistance from the government in the form of the Countercyclical Policy.Cara Mengutip:Ilahiyah, M. E., Padilla, M. A. E., & Palupi, D. (2021). Covid-19 dan Dampaknya Terhadap Kinerja Bank BUMN di Indonesia. Esensi: Jurnal Bisnis dan Manajemen, 11(1), xx-xx. https://doi.org/10.15408/ess.v11i1.19297

    The impact of exchange rate volatility on Indonesia's top exports to the five main export markets

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    This study examines the impact of exchange rate volatility on Indonesia's primary export commodities to the top five export destination countries, namely China, India, Japan, South Korea, and the United States. This study uses a GARCH model to obtain an estimated value of exchange rate volatility, using monthly data covering from 2006 to 2018. The ARDL method helps to measure the effect of exchange rate volatility on exports to destination countries in both the short and the long-term. Aggregate exports are compared employing a linear (ARDL) and a non-linear autoregressive distributed lag model (NARDL). The findings suggest that exchange rate volatility has a significant effect on exports of commodities under code 26 (ores), 38 (chemicals), 40 (rubber), and 47 (pulp paper) to India, Japan, South Korea, and the United States, either in the short or long-run. The exchange rate volatility of exports to China only affects plastics goods (code 39), although many goods experience negative effects due to exchange rate depreciation. In India, exchange rate volatility affects the largest number of export commodities. The Index of Industrial Production (IIP) has a strong long-term effect on exports to Asian countries. Impacts due to exchange rates offer both negative effects and positive effects (expected) in exports at commodity and trade partner case-to-case levels. Both aggregate ARDL and NARDL models suggest that Indonesian exports are negatively affected by exchange rate fluctuations

    Production Networks Under the ASEAN Plus Six. A Good deal or a Threat?

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    This study breaks up the gross trade of ASEAN countries into the different components of Value-added trade to analyze the integration of ASEAN into the Global Value Chain (GVC). The study employs a global input-output database using data by the years1997, 2004, and 2012. The research considers the possible effects of expanding ASEAN into an ASEAN Plus Six agreement from the Vertical Specialization point of view. Gross trade is further broken down into nine components of value-added trade which creates a series of indicators of value creation, participation-position in GVC, among others. The study found that ASEAN has made significant gains in enlarging total trade (235%), and thus undergoing a particularly faster growth in production sharing structures. Over the time, ASEAN has assumed a notable function across the GVC as a provider of value-added through parts and components (33%) than as a producer of final goods (30%). Vertical trade accounts for more than 43% of ASEAN gross exports, but it depends on foreign intermediate goods (35%) to produce its exports, most of them are supplied from Asia. ASEAN single production region has gained a little while it has grown with Asian partners and lost market share with NAFTA and Europe. The ASEAN Plus six leads to a broad range of integration and might translate to larger gains than Intra-ASEAN trade. While ASEAN is expanding faster regionally than globally, both in supplies and in demand, the ASEAN internal market might not be large enough to drive growth. Meanwhile the dynamics of ASEAN appear as being part of a strong GVC through Asia

    Formation of production networks in ASEAN: Measuring the real value-added and identifying the role of ASEAN countries in the world supply chains

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    This study addresses the two-fold question of whether the integration-liberalization process of ASEAN is headed towards the creation of a single production base region, and how ASEAN links with other trade blocks. It looks into the degree of intra-ASEAN and extra-ASEAN vertical integration vis-à-vis North America, East Asia, and the European Union through the measurement of value-added creation-absorption in global value chains (GVC) and by locating ASEAN within vertical structures. The study employs an international input-output database and breaks up gross exports into different components of value-added using data from 1997, 2004, and 2012. ASEAN has made significant gains in integrating with East Asia. However, ASEAN as a single production region has gained little, and even lost share in value-added trade with NAFTA and Europe. The truth is that ASEAN has a stronger role across the GVC as a supplier of intermediate goods (33%) than as a supplier of final goods (30%). Vertical structures represent more than 43% of ASEAN gross exports, but it still depends on foreign parts and components (35%) to produce its exports. It may be argued that ASEAN + 6, which entails a wider scope of integration, might offer larger benefits to the ASEAN project

    Criminality and Income Inequality in Indonesia

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    We investigate whether a nexus exists between income inequality and criminal activity in Indonesia. Additionally, we examine socioeconomic variables and potential links with criminal actions (i.e., crime rate, murder, rape, physical abuse, robbery, and fraud). We use the generalized method of moments (GMM) approach, employing data for 34 provinces in Indonesia over the period of 2010–2019. The results indicate that income inequality is associated with higher criminal activity. Overall, lower unemployment, larger investment (foreign and domestic), and higher human development (education and health) can help reduce crime in Indonesia. However, higher income can reduce physical abuse and crime rates, but theft and fraud increase with income growth. Rising unemployment increases rape, abuse, robbery, and fraud. Still, unemployment does not affect murder, suggesting that non-economic factors are dominant in explaining murder and violent crimes. Furthermore, income inequality can increase robbery and fraud, although it has no significant effects on murder, rape, and abuse. Government spending on social assistance and more efficient settlement of criminal acts can lower crime rates

    FORMATION OF PRODUCTION NETWORKS IN ASEAN: MEASURING THE REAL VALUE-ADDED OF ASEAN COUNTRIES IN THE GLOBAL VALUE CHAIN AND IDENTIFYING THEIR ROLE IN VERTICAL STRUCTURES

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    This study addresses the two-fold question of whether the integration-liberalization process of ASEAN is headed towards the creation of a single production base region, and how ASEAN links with other trade blocks. It looks into the degree of intra-ASEAN and extra-ASEAN vertical integration vis-à-vis North America, East Asia, and the European Union through the measurement of value-added creationabsorption in global value chains (GVC) and by locating ASEAN within vertical structures. The study employs an international input-output database and breaks up gross exports into different components of value-added using data from 1997, 2004, and 2012. ASEAN has made significant gains in integrating with East Asia. However, ASEAN as a single production region has gained little, and even lost share in value-added trade with NAFTA and Europe. The truth is that ASEAN has a stronger role across the GVC as a supplier of intermediate goods (33%) than as a supplier of final goods (30%). Vertical structures represent more than 43% of ASEAN gross exports, but it still depends on foreign parts and components (35%) to produce its exports. It may be argued that ASEAN + 6, which entails a wider scope of integration, might offer larger benefits to the ASEAN project

    An analysis in comparative advantage in manufacturing sector as a determinant of trade expansion: the Indonesian and Mexico Case 1989-2011

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    The dynamic changes experienced in international trade in terms of volumes, varieties and destinations in manufacturing goods suggests that a change in comparative advantage has occurred for industrial and developing countries. The present study analyzes the impact of the dynamism in international trade in the change of comparative advantage in manufacturing sector for the case of Mexico and Indonesia for the period of 1989-2011. It was found that the trade pattern of Mexico has change significantly in the last 23 years turning into new industrial activities, meaning a deep change in variety of products, human capital and technology intensity at structural level. As for Indonesia the change was found to be also significant even though at less degree than Mexico but with the particularity of keeping the traditional industries as the backbone of exports while developing some new industries. A good number of opportunities for trade expansion were found for Mexico and Indonesia since both countries specialized in different variety of products under different factors intensities

    Worker Transition Across Formal and Informal Sectors: A Panel Data Analysis in Indonesia

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    This paper examines the transition of workers between formal and informal jobs based on socio-demographic and employment characteristics. The study identifies factors that increase the likelihood of workers remaining in formal employment. The multinomial logistic regression model is incorporated to analyze labor transitions based on data from Indonesia's National Labor Force Survey (Sakernas) of 2017–2018. The findings show that 56.34% of workers were in informal activities and 30.58% were in formal jobs. Workers who transition from informal to formal jobs made up 6.84%, while 6.24% transitioned from formal to informal occupations. Informal workers were reluctant to move to the formal sector. Workers who are younger, unmarried, male, living in urban areas, and more educated are more likely to relocate from the informal to the formal sector. Work experience and participation in certified training can help shift workers to the formal sector, especially within the manufacturing industry

    Indonesia Industrial Productivity Growth: Evidence of Re-industrialization or De-industrialization?

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    This study employs a Stochastic Frontier Analysis to decompose Total Factor Productivity for the manufacturing corridor of Indonesia. Technological progress, technical efficiency change, and scale effects are captured at a firm level covering all Java provinces from 2007 to 2013. The period is of particular interest as it covers the efforts of re-industrialization under the Master Plan for Acceleration of Indonesian Economy (MP3EI) and the sharp increase-decrease in global demand and global prices. The study captures sources of productivity growth supporting/deterring output growth, differentiating across firm characteristics based on size (large and medium), technology intensity, skill intensity, location (province), and capital-output ratio employed in production. As firms differ in the five elements, productivity and efficiency performance also differ. This paper questions whether productivity growth is limited to conventional sources -input growth and technological progress-, or if manufacturing is managing some gains through non-conventional channels -technical efficiency and scale effects. The paper also questions the presence of patterns in productivity among group firms (characteristics), finding that firms which combine a low-tech level, a higher skill ratio, and are medium in scale reported TFP at least 70 % higher than the average firm. Combinations of firm size, technology, skills, and ratio output affect the performance. Cost analysis of factors of production is also carried out, finding that energy is canceling out possible gains in scale effects by rising disproportionately both in consumption and prices. TFP growth was found to be negative and falling, raising the possibility of a path towards de-industrialization
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