TRENDS AND DETERMINANTS OF THE GEOGRAPHICAL DISTRIBUTION OF ECONOMIC ACTIVITIES: EVIDENCE FROM INDONESIAN MANUFACTURING | Zendy

Khoirunurrofik Khoirunurrofik | Zendy

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TRENDS AND DETERMINANTS OF THE GEOGRAPHICAL DISTRIBUTION OF ECONOMIC ACTIVITIES: EVIDENCE FROM INDONESIAN MANUFACTURING

Author(s) -

Khoirunurrofik Khoirunurrofik

Publication year - 2017

Publication title -

journal of indonesian applied economics

Language(s) - English

Resource type - Journals

eISSN - 2541-5395

pISSN - 1907-7947

DOI - 10.21776/ub.jiae.2017.007.01.2

Subject(s) - indonesian , decentralization , economies of agglomeration , distribution (mathematics) , economic geography , index (typography) , wage , manufacturing , economics , geography , business , economic growth , labour economics , market economy , mathematical analysis , philosophy , linguistics , mathematics , marketing , world wide web , computer science

The paper analyzes the trends and determinant factors vis-a-vis spatial distribution in Indonesian manufacturing during the period of 1990–2010. There is a long-term increasing trend of regional specialization driven by core regions within Java and by affluent regions outside of Java. Among resource-based and labor-intensive industries, there is a smoothly declining trend of geographic concentration. An increasing trend in regional specialization and geographic concentration during the economic crisis is identified, which turns into a decreasing trend at the onset of setting up a decentralization policy and then again pushed upward. Finally, by applying spatially weighted Ellison-Glaeser (EG) Index, it is found that labor skills, export activities, and wage rates strongly determine the degree of agglomeration among Indonesian manufacturing industries. Keywords : Agglomeration, Asian financial crisis, decentralization, regional specialization, geographic concentration, global economy. JEL: R11, R12, R14,R30

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