Spatial Concentration of the Informal Small and Cottage Industry in Indonesia

Abstract

This paper discusses the spatial concentration of the small and cottage industry without legal entity in Indonesia. The study period is 1998-2004 or a period after economic crisis which commonly known as the ‘era reformasi’ (reformation era). By employing the Herfindahl index, this study found an increase in the spatial concentration of the informal small and cottage industry during this period. It argues that reformation tend to increase the spatial concentration of the informal small and cottage industry. Beside the economic crisis that have suffered urban and Java areas, other possible explanation on the connection between trend of the concentration and the reformation is what commonly known as the cost of formality.spatial concentration, small and cottage industry, reformation, Indonesia