Tri Oldy Rotinsulu
Universitas Sam Ratulangi, Indonesia

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Sectoral Public Expenditure and Income Inequality in Indonesia: A Spatial Panel Approach Ita Pingkan Fasnie Rorong; Tri Oldy Rotinsulu; Dennij Mandeij; Muhammad Ridwan Manulusi; Angela Nirmala Maria Lumi
Journal of Economics, Entrepreneurship, Management Business and Accounting Vol 4 No 4 (2026): Volume 4, Issue 4, July 2026
Publisher : CV. Sakura Digital Nusantara

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.61255/jeemba.v4i4.1152

Abstract

Purpose – This study evaluated the impact of sectoral local government expenditures (economic, health, education, and social protection) on regional income inequality. To address the specification bias inherent in traditional frameworks, this research explicitly accommodated spatial spillover mechanisms. Design/methodology/approach – The empirical analysis utilized a balanced macro-level panel dataset comprising 33 Indonesian provinces, yielding 495 observations over a 15-year observation period from 2010 to 2024. A Spatial Durbin Model accommodated unobserved individual heterogeneity while simultaneously capturing endogenous spatial interactions. Marginal policy impacts were extracted via Monte Carlo parametric bootstrap simulations. Finding/Results – A positive spatial autoregressive parameter confirmed that income inequality in one province systematically influenced contiguous territories. Decomposing the marginal impacts revealed that local educational expenditures directly compressed internal income inequality. Conversely, health allocations exhibited a positive direct effect on the Gini ratio. Furthermore, localized economic expenditures generated negative spatial spillovers that significantly reduced income disparities across neighboring provinces. Originality/Value – Policymakers must transition from isolated fiscal planning toward coordinated interregional public investments to leverage positive agglomeration externalities. Physical infrastructure expansion requires harmonization with targeted social protection frameworks. Future research should integrate intra-regional microdata and explore the nonlinear threshold effects of fiscal decentralization to refine territorial wealth redistribution strategies.
Behavior and Determinants of Public Savings in Commercial Banks in Indonesia: A Dynamic Model Approach Tri Oldy Rotinsulu; Paulus Kindangen; Hanly Fendy DJohar Siwu
Journal of Economics, Entrepreneurship, Management Business and Accounting Vol 4 No 4 (2026): Volume 4, Issue 4, July 2026
Publisher : CV. Sakura Digital Nusantara

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.61255/jeemba.v4i4.1159

Abstract

Purpose – This study evaluated the impact of macroeconomic determinants (Bank Indonesia policy interest rate, commercial bank deposit rate, national inflation rate) and demographic shifts (productive-age population) on public savings within Indonesian commercial banks. To resolve frequency discrepancies between annual demographic and quarterly macroeconomic data, a static temporal disaggregation procedure was applied. Design/methodology/approach – The empirical analysis utilized a quantitative time-series dataset spanning an eight-year observation period from 2016 to 2023. A dynamic Error Correction Model (ECM) accommodated short-term behavioral responses while simultaneously capturing long-term structural equilibrium adjustments. Finding/Results – The estimation established that policy and deposit interest rates yielded statistically insignificant impacts on public savings across both temporal horizons. In contrast, the national inflation rate exerted a negative and significant influence on deposit volumes. Furthermore, a larger working-age population exhibited a positive and significant effect on long-term capital accumulation. The dynamic framework confirmed a negative Error Correction Term, proving that savings behavior requires a transitional phase to correct temporal deviations following macroeconomic shocks. Originality/Value – Policymakers must transition from isolated monetary rate manipulations toward integrated macroeconomic and demographic strategies. Synchronizing inflation control mechanisms with long-term demographic planning provides a robust foundation for institutional funding, demonstrating that structural economic stability dictates saving capacities more decisively than traditional yield incentives.