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All Journal JDE (Journal of Developing Economies) Economics Development Analysis Journal
Djoni Hartono
Department of Economics, Faculty of Economics and Business, Universitas Indonesia, Depok, Indonesia
Economics, Econometrics & Finance

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A Dynamic Panel Analysis of Human Development and Environmental Sustainability in Indonesia Ariyan Bajrayuda; Djoni Hartono
Economics Development Analysis Journal Vol. 15 No. 1 (2026): Economics Development Analysis Journal
Publisher : Universitas Negeri Semarang

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.15294/edaj.v15i1.41791

Abstract

As decentralized emerging economies navigate the complex trade-offs between rapid industrialization and ecological preservation, understanding the nuanced drivers of environmental sustainability becomes critically imperative. This study investigates the dynamic interplay between human development and environmental quality across 34 Indonesian provinces from 2013 to 2020. Recognizing that regional ecological trajectories are highly path-dependent and that traditional static panel models frequently yield biased estimates, we employ a System Generalized Method of Moments (GMM) approach. This methodological framework rigorously addresses the inherent endogeneity and reverse causality between macroeconomic expansion and environmental outcomes. The model incorporates Foreign Direct Investment (FDI), physical capital, economic growth, and population as control variables, all of which exhibit negative coefficients, suggesting that current macroeconomic expansion and demographic pressures pose significant challenges to regional environmental quality. Despite these pressures, the research novelty reveals that human development dimensions particularly education and welfare—act as critical countervailing forces. Our findings confirm that while industrial and population scaling currently degrade the environment, qualitative improvements in human capital can catalyze a transition toward green growth. Policy implications suggest that Indonesia must shift from a 'grow first, clean up later' strategy toward selective FDI screening and 'green-weighted' development metrics to decouple economic progress from ecological decline.
Regional Economic Development and Private Car Ownership in Java, Indonesia Andriana Kumalasari; Djoni Hartono
Journal of Developing Economies Vol. 11 No. 1 (2026)
Publisher : Universitas Airlangga

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20473/jde.v11i1.78729

Abstract

Objective: This study examines the relationship between regional economic development and private car ownership across 114 cities and regencies on Java Island, Indonesia, between 2015 and 2023, using data from Statistics Indonesia (BPS) and the Ministry of Transportation. Methods: The study applies a Correlated Random Effects (CRE) panel model with instrumental variable techniques to identify both within- and between-associations and to address potential endogeneity. The analysis is conducted using the full sample and subsamples by region and by city/regency size to capture heterogeneous effects across Java. Findings: The results indicate that per capita regional GDP and mean years of schooling are positively and significantly associated with private car ownership across all cities/regencies. In the Jakarta Metropolitan Area (JMA), population density is negatively and significantly associated with private car ownership, reflecting the region’s disadvantages of private car use. Conversely, in large cities/regencies, road infrastructure has a negative and significant association with car ownership, but population density maintains a positive and significant association, indicating insufficient public transportation services. Originality/Value: This study contributes to the literature by providing the first Java-wide panel analysis that jointly estimates within- and between-effects and addresses endogeneity in the economic development–car ownership nexus. Practical/Policy Implication: In the JMA region, first- and last-mile connectivity should be strengthened. In large cities/regencies, integrated multimodal transport systems should be developed to suppress the growth of private car ownership. In small cities/regencies, the Central Government should play a key role in supporting investment and planning for sustainable transportation.  
Co-Authors Andriana Kumalasari Ariyan Bajrayuda