Optimum: Jurnal Ekonomi dan Pembangunan

Analysis of the causality between economic growth and government spending: Wagner’s law versus Keynes hypothesis

Yasmin Yasmin, Willa Fatika Sari — Wed, 02 Oct 2024 00:00:00 +0000

The relationship between economic growth and government spending has been extremely ambiguous over the last few years. In this matter, both Wagner and Keynes expressed their views. However, several research with varying results on those hypotheses. The Keynesian hypothesis, Indonesia's Wagner's law, and the relationship between economic growth and government spending were thus all investigated by the researchers in this study. The Granger causality test and the Engle-Granger cointegration test were used in order to determine the direction with which both variables are linked, as well as a longer-term association. The outcome demonstrated that economic growth and government spending do not have a long-term relationship. In contrast, the causality test revealed a one-way correlation between government spending and economic growth, implying that Wagner's law was applicable in Indonesia. Accordingly, the government must reconsider government spending that is perceived to be less efficient in encouraging economic growth, such as subsidy programs and public goods procurement. Additionally, the government ought to consider reducing government spending and expanding private sector participation in economic development given that Wagner's law has been demonstrated to be applicable in Indonesia.

Economies of scale, efficiency and profitability of the convection industry in the city of Palembang

Tomi Sandrat, Mukhlis Mukhlis, Deassy Apriani — Wed, 02 Oct 2024 00:00:00 +0000

The development of the industrial sector is greatly influenced by economies of scale, efficiency and profitability. The small convection industrial sector always follows changes in clothing models and creativity that consumers like. This research aims to find out the value of economies of scale and measure the level of efficiency and profitability in small convection industries in the city of Palembang. The type of data used is primary data related to small convection industries in Palembang City. The research method used is qualitative and quantitative with analysis of the scale of production results using the Cobb-Douglas production function, efficiency and profitability. The research results show that the variables of labor (X1), capital (X2) and digital technology (dummy) simultaneously and partially have a positive and significant effect on the amount of production (Y). The economic scale of the small convection industry in Palembang City is in a condition where the return to scale is decreasing. The efficiency value is above average at 52 percent and below average at 48 percent. Agencies or authorities at the Palembang City level, including related parties, are expected to be more active in socializing People's Business Credit so as to facilitate capital and marketing of small convection industries, because based on the results of in-depth interviews with respondents, overall they already have business capital, and the government is expected to be able to distribute it. assistance with production support equipment to business actors thereby providing encouragement to improve production performance.

Competitiveness of Indonesia’s export products with IJEPA cooperation framework

Lestari Sukarniati, Firsty Ramadhona Amalia Lubis, MD. Modabber Hossain — Wed, 02 Oct 2024 00:00:00 +0000

Bilateral cooperation between Indonesia and Japan Economic Partnership Agreement (IJEPA) is a form of bilateral cooperation between Indonesia and Japan that carries the concept of the Economic Partnership Agreement (EPA). With one of IJEPA's goals in the form of capacity building, Bilateral cooperation between Indonesia and Japan Economic Partnership Agreement (IJEPA) is a form of bilateral cooperation between Indonesia and Japan that carries the concept of the Economic Partnership Agreement (EPA). With one of IJEPA's goals in the form of capacity building, IJEPA provides space for both parties to collaborate in order to increase the competitiveness of Indonesian producers. Problems in trying to maximize the impact of the IJEPA agreement on increasing domestic product product industries have encouraged Indonesia to be able to determine what products are worthy of being superior products in the context of international trade conducted with Japan. This study analyzes the trade and competitiveness of Indonesian products using Revealed Symmetric Comparative Advantage (RSCA) and Product Mapping.The results of the product mapping analysis show that there are 3 commodities that are included in the top five highest comparative advantage in 2003, 2013 and 2021, namely HS 11 commodities (Milling Industrial Products; Malt; Starch; Inulina; Wheat Gluten) HS code 21 (Extracts, essences and concentrates, from coffee, tea or mate and preparations with a basis of these products or with a basis of coffee, tea or mate) and HS code 25 (Salt; Sulfur; Soil and Stone; Plaster, Cal and Cement). This shows that these three products can be used as specialization products for Indonesia's trade with Japan.

Analysis of human capital for infrastructure development relation to industrialization in Indonesia

Nur Lailah Afrianti, Syafitri Syafitri, Muni Anisa, Khairil Insan Bintang — Wed, 02 Oct 2024 00:00:00 +0000

This research aims to analyze the value-added between infrastructure and industrialisation in Indonesia and both as critical aspect that supports the achievement of 9 Sustainable Development Goals (SDG). SDG 9 focuses on building durable infrastructure, promoting inclusive and sustainable industrialisation, and encouraging innovation. This research focuses on analyze the impact of infrastructure on the level of industrialisation, taking into account the modulation by human capital. Data analysis was conducted using Stata version 16 software with the aim of testing the direct impact of variables as well as testing the indirect impact through the application of the Sobel test. The Sobel test aims to analyse the dataset from 1990-2022. This research specifically explores the Indonesian context as a case study, identifying infrastructure variables that are significant in shaping the level of industrialisation in the country. In addition, this research involves an in-depth analysis of the role of human capital in moderating the impact of infrastructure on the level of industrialisation. The significance of this research lies in its potential to address critical knowledge gaps in understanding the complex interplay between infrastructure development, industrialization, and economic growth in Indonesia. The implication of the study that investment on infrastructure for industrialization can absorb labor.

Impact of pandemic COVID-19 on the E-banking customer behavior: Case of Indonesia

Fani Pramuditya, An Nisa Febri Azis — Wed, 02 Oct 2024 00:00:00 +0000

This study aims to evaluate the factors affecting customers' acceptance and use of the internet and mobile banking during the COVID-19 pandemic. In Indonesia, the COVID-19 epidemic has encouraged residents to utilize other payment methods rather than cash, which easily spreading the virus. Internet and mobile banking are examples of technological innovations which can assist banking customers during the COVID-19 pandemic since it is safer, easier to access, and needs less human interaction. This paper utilizes a Unified Theory of Acceptance and Use of Technology (UTAUT) Model to assess consumers' intentions to use the internet and mobile banking. Previous research discussed the mobile banking adoption during the Covid-19 in various fields. Therefore, it is important to analyze the mobile banking intention and behavior in Indonesia. The data collected from questionnaires are used to evaluate the conceptual model, which shows the relationship between UTAUT constructs, performance expectancy, experience expectancy, and social influence. From 158 questionnaires with diverse demographic backgrounds gathered, we found that effort expectancy, performance expectancy, and social influence have a positive impact on the behavioral intention. Furthermore, it found that behavioral intention and facilitating conditions have influence on the using behavior. These results give a suggestion to both the banking industry and government to improve their mobile banking system to improve financial inclusion.

Tourism sector in Bukittinggi: Analysis of tourism competitiveness before and after COVID-19

Fadhilah Syawal, Alpon Satrianto — Wed, 02 Oct 2024 00:00:00 +0000

The tourism industry, a crucial service sector, has been significantly impacted by the global pandemic, Covid-19. This impact has not only affected the development of tourism but also the regional economy. Bukittinggi, a key tourism city in West Sumatra, now more than ever, requires a competitive analysis to ensure its continuous growth. This research is aimed at analyzing and comparing Bukittinggi's tourism competitiveness before and after Covid-19. The research, a quantitative descriptive study with an exploratory research design, utilizes Competitiveness Monitor analysis. The data, sourced from BPS, BKD, and Bukittinggi Tourism Office, is secondary. The research results present the comparative results of the Tourism Competitiveness Analysis of Bukittinggi city as follows: a). PCI before Covid-19 was greater than after Covid-19; b). EI competitiveness before Covid-19 was higher than after Covid-19; c). HTI after Covid-19 was higher than before Covid-19; d). IDI after Covid-19 is higher than before Covid-19; e). OI after Covid-19 is higher than before Covid-19; 6). HRI after Covid-19 is higher than before Covid-19; f). TAI Value competitiveness index after Covid-19 is higher than before Covid-19; g). SDI before and after Covid-19 is equal. This research explains comparison of Bukittinggi's tourism competitiveness before and after Covid-19. The contribution of study are: a). consideration on improving tourism sites; b). Tourism management needs to be carried out in an integrated manner; and c). The government is expected to conduct more repairs and maintenance on tourism locations to increase visitor comfort when traveling.

Analysis of financial inclusion and financial stability on economic development in APEC member countries

Wed, 02 Oct 2024 00:00:00 +0000

Financial inclusion and financial system stability are important instruments in a country's economic development. Both financial systems are critical for developing countries to improve people's welfare, promote inclusive economic growth, and protect the financial system from shocks and crises. Financial inclusion is a measure of people's accessibility to financial products and services. Meanwhile, a stable financial system will accelerate the country's economy. Therefore, this research aims to determine the effect of financial inclusion and financial system stability on economic development in APEC member countries. The data used is in panel form using the Fixed Effect Model method. This paper takes 20 member countries of the Asia Pacific Economic Cooperation (APEC) as the research object, collect the data from 2008 to 2021. The research results show that financial inclusion has a significant effect on the economy on the penetration and usability y proxies, while the availability proxy is not significant. Furthermore, the Bank Z-score as an indicator of financial system stability also has a significant influence on the economy, followed by two additional variables, namely inflation and the Financial Development Index. The conclusion is that financial inclusion and financial system stability have a positive influence on a country's economic development. Implications of this study suggest that the bank has to expand the network in the financial sector that the community can reach, then make people believe and be confident to create accounts so that people can conduct financial transactions easily and efficiently that help to improve the economy.

Analysis of regional growth center and hinterland in Bantul regency

Alivia Rianti Putri, Unggul Priyadi — Wed, 02 Oct 2024 00:00:00 +0000

Increasing regional economic efficiency can be done through accelerated regional growth. Growth acceleration is known to produce two groups of regions, namely the growth center and Hinterland (supporting areas). This study aims to analyze the sub-districts that become growth centers and determine the value of community interaction between regions in Bantul Regency through comparative data in 2020 and 2022. In this study, secondary data is obtained through BPS Bantul Regency, which includes data, government facilities, education facilities, health facilities, worship facilities, economic facilities, communication facilities, tourism facilities, population, and distance between sub-districts. The analysis method used in this research is scalogram and gravity analysis, which was processed using Microsoft Excel. The results of the scaling analysis show that in 2020, there are five regional growth centers in Bantul Regency, which include Kasihan Subdistrict, Sewon Subdistrict, Banguntapan Subdistrict, Jetis Subdistrict, and Bambanglipuro Subdistrict. Meanwhile, in 2022, the scaling analysis shows that there are five regional growth centers in Bantul Regency, which include Banguntapan Sub-district, Sewon Sub-district, Jetis Sub-district, Kasihan Sub-district, and Kretek Sub-district. Then, the results of the gravity analysis show that there are different interaction values. The research results show that local governments need to prioritize the development of sub-districts that are still Hinterland by the RPJMD of Bantul Regency.

Mitigation of regional poverty in East Kalimantan: A village level panel data analysis

Lukman Hakim, Selfia Bintariningtyas, Aulia Hapsari Juwita, Mulyanto Mulyanto — Wed, 02 Oct 2024 00:00:00 +0000

Poverty is a specific problem so that programs that pay attention to spatial or demographic aspects are crucial to being able to create programs that are right on target in alleviating poverty. Apart from looking at demographic factors, we also analyze technological and institutional factors. This research aims to develop a Regional Poverty Mitigation Model in the province of East Kalimantan. This model is designed to provide a comprehensive framework for understanding and addressing poverty in the region. The focus of this research is specifically on the problem of poverty in the province of East Kalimantan. The data used in this study is the latest data from the 2021 Village Potential (Podes) of East Kalimantan province, which includes 1039 villages. The method used in this study is a quantitative analysis method using panel data which is then performed regression. The results show that geographical variables (regional areas and bordering the sea) have a negative and significant relationship to poverty in East Kalimantan, and technology has a positive and significant relationship to poverty in East Kalimantan. In addition, institutions (health and education) have a positive and significant relationship to poverty in East Kalimantan.

Determinants of circular migration patterns to Badung regency

I Kadek Rio Dwi Pebrian, Made Dwi Setyadhi Mustika — Wed, 02 Oct 2024 00:00:00 +0000

The influence of migration causes the growth of the population in a region. Migration occurs due to imbalances in development, especially in the economic sector. Whereby people migrate to obtain employment due to high wages and job opportunities in the destination area. This research analyzes the factors influencing the population's decision to engage in circular migration to Badung Regency. The analytical tool used is logistic regression analysis, specifically Binary Logistic Regression. The sample consists of 123 respondents. The research results indicate that variables such as wage levels, number of family dependents, gender, activities in the area of origin, distance, age, and squared age collectively and significantly influence the decision of the population to engage in circular migration to Badung Regency. Partially, the research results show that the number of family dependents, gender, activities in the area of origin, and age significantly positively affect the decision of the population to engage in circular migration to Badung Regency. Meanwhile, wage levels, distance, and squared age significantly negatively affect the population's decision to engage in circular migration to Badung Regency.

Exploring the interaction between Kendari’s economic growth and its hinterland

Yuyun Anggraini, Suci Rahmawati Prima, Neks Triani, Hariono Hariono — Wed, 02 Oct 2024 00:00:00 +0000

In order to attain high economic growth and equitable economic development, each region has to determine its regional economic growth centre. The existence of an economic growth center allows for the concentration of economic activity, which in turn has a ripple effect on the surrounding areas (Hinterland). This study was carried out to identify the primary centres of economic growth in Kendari and analyse their interactions and influence on the surrounding hinterland. This study employed both primary and secondary data, which were analysed using scalogram analysis, centrality index analysis, and gravity analysis. The findings indicate that among the eleven sub-districts in Kendari, three of them, namely Kadia, Kendari Barat, and Mandonga, serve as economic growth centres. Each economic growth centre is connected with a primary hinterland that exhibits the highest level of attraction or interaction value when compared to other districts. Among these centres, Kadia is the sub-district with the higher growth centre hierarchy and it has the highest interactions with Wua-wua. The interaction value between Kadia and Wua-wua is 139595130.7. Kendari Barat is the second growth centre in terms of its interactions with Mandonga, with an interaction value of 710383315.6. Mandonga is the third growth centre that has the highest level of interaction with Kendari Barat, with an interaction value of 710383315.6. The implication of the study is to formulate more targeted policies based on strong empirical evidence.

Determinants of foreign direct invesment in eight ASEAN countries

Rastiati Rastiati, Rifki Khoirudin — Wed, 02 Oct 2024 00:00:00 +0000

This research aims to analyze the influence of economic growth, labor, regulatory quality, political stability, and carbon emissions on Foreign Direct Investment (FDI) in eight member countries of the Association of Southeast Asian Nations (ASEAN). With strong economic growth, a qualified workforce, good regulations, stable politics, and low environmental degradation, ASEAN member countries have great potential for investment, which generates long-term returns. This makes the ASEAN region interesting to analyze the factors that influence FDI in the region. Using the Seemingly Unrelated Regression (SUR) method and secondary data from the World Bank, this study combines cross-sectional and time-series data to provide a comprehensive overview. The research findings indicate that variables such as labor, regulatory quality, political stability, and carbon emissions have a significant impact on foreign direct investment in ASEAN countries. These findings underscore the importance of these factors in determining the direction and volume of foreign investment. This study contributes significantly to understanding the dynamics of foreign investment in the ASEAN region and highlights the importance of efforts to improve political stability, regulatory quality, and manage carbon emissions to drive economic growth through foreign capital inflows. The implications of these findings can serve as a policy foundation for governments and stakeholders in ASEAN to enhance the attractiveness of foreign investment.

COVID-19 pandemic and housing demand mortgage: Partial adjustment model approach

Fitri Juniwati Ayuningtyas, Anggrismono Anggrismono — Wed, 02 Oct 2024 00:00:00 +0000

One of the efforts to encourage the fulfillment of housing needs is the provision of housing both from the government and the private sector by considering the community's purchasing power. The background of this research is that the fulfillment of housing needs by both the government and the private sector has yet to be maximized while the demand for housing is relatively high. This research is still necessary because the demand for housing is still high. Increased housing demand will push house prices due to limited housing land. The problems faced focus on the relatively high demand for mortgages because even in the conditions of the COVID-19 pandemic, people still make houses their top priority. This study aims to analyze the effect of people's income, loan interest rates, the amount of housing finance, and dummy before and during the COVID-19 pandemic on housing demand mortgage. The data analysis technique in this study used multiple regression Partial Adjustment Model (PAM). The results showed that the variables of income as proxy for GDP and loan interest rates significantly affected housing demand mortgage. In contrast, the amount of housing finance and the COVID-19 dummy had no significant impact. The research implication that researchers can provide to the government is to provide policy recommendations regarding the Housing Finance Liquidity Facility (FLPP) program, which is intended for low-income communities.

Indonesian migrant live-in care workers in rural Taiwan: Making friendships, kinships, and creating social capital overseas

Danur Condro Guritno, Rakhmundia Aryo — Wed, 02 Oct 2024 00:00:00 +0000

Taiwan serves as a main destination for Indonesian females seeking work as migrant live-in care workers. However, being a migrant worker requires efforts to face challenges and difficulties overseas to achieve family well-being. One of them is utilizing social capital. Studies on social capital among migrants tend to be unisex, with a limited focus on women as the main actors. Therefore, it is crucial to examine how these women create and utilize their social capital to fulfill their needs. This paper examines the form of social capital of Indonesian migrant live-in care workers (LCWs) in Taiwan, highlighting their unique characteristics, given the specific nature of their job roles. Using a phenomenological approach, the study involves in-depth research and direct data collection. Data analysis follows a structured process including data reduction, display, verification, and conclusion. This essay finds a new structure in social capital and migration by positioning women as the main actors. It shows that LCWs primarily rely on bonding social capital, forming strong, exclusive friendships often based on geographical proximity, characterized by long-distance and close-distance patterns. Participation in social groups such as pengajian does not enhance LCWs' social capital, resulting in weak ties within bridging social capital. Additionally, LCWs tend to develop stronger relations with their employers, enabling them to access various resources through linking social capital, which differs from bonding and bridging social capital. This essay concludes that LCWs in Taiwan predominantly utilize bonding and linking social capital to achieve their migration expectations.

Village funds and village-level of economic growth: A case study in Pamekasan

Yetty Dewi Oktaviya, Sutikno Sutikno — Wed, 02 Oct 2024 00:00:00 +0000

Village funds have become a significant strategy in the government's efforts to improve economic development at the village level, and village funds play a role in encouraging equitable village economic growth in Pamekasan Regency but still require a more in-depth evaluation. This research is based on the condition of even village economic growth in Pamekasan Regency villages, which is still below the average of 29.53. A study aims to analyze the relationship and how much influence there is between village funds, poverty-free villages, developing village index, and villages without disparity on the increase in the economic growth score of the village equally. The data collection technique is a documentation technique sourced from the Ministry of Villages, Development of Disadvantaged Regions and Transmigration. The method used in this study is multiple linear regression. The study results show that the increase in the economic growth score of the village is evenly responded to positively by villages without poverty and without inequality. On the other hand, the increase in the economic growth score of the village is responded negatively by the village fund because the higher the economic growth score of the village is even, the village fund budget will be reduced. After all, the welfare of the community begins to be achieved. The implication of the study is to provide input for related agencies and village communities in increasing the score of equitable village economic growth in Pamekasan Regency villages.