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All Journal Ekonomikalia Journal of Economics Grimsa Journal of Business and Economics Studies
Mose, Naftaly
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Decision Sciences, Operations Research & Management Economics, Econometrics & Finance Energy Environmental Science Social Sciences

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Freedom and Prosperity: The Impact of Political Rights and Civil Liberties on Economic Complexity Hardi, Irsan; Mose, Naftaly; Tanchev, Stoyan; Siregar, Muhammad Ilhamsyah; Bozkaya, Seyma
Ekonomikalia Journal of Economics Vol. 3 No. 2 (2025): October 2025
Publisher : Heca Sentra Analitika

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.60084/eje.v3i2.329

Abstract

As governance and economic sophistication become increasingly interconnected, understanding their relationship is crucial for shaping national growth strategies. This study investigates the impact of political rights and civil liberties on Indonesia’s economic complexity from 2006 to 2021 by disaggregating the Economic Complexity Index (ECI) into trade, technology, and research components. Indonesia serves as an ideal case study due to its dynamic political landscape, evolving civil liberties, and its strategic role as an emerging economy with untapped potential for economic diversification. While a growing body of literature explores the intersection of political and economic development in Indonesia, no prior study has specifically examined the relationship between the Freedom in the World ratings (as an indicator of political rights and civil liberties) and the distinct dimensions of ECI. The analysis employs Gaussian identity-link Generalized Linear Models (GLMs), with robustness checks using Robust Least Squares, and adopts a decomposition approach that includes a set of control variables such as GDP per capita and FDI inflow. The results across both the main and robustness check methods consistently show that political rights and civil liberties contribute positively to ECI-technology, but negatively affect ECI-trade and have no significant effect on ECI-research. These findings underscore the sector-specific nature of political and democratization influences on economic complexity in Indonesia and imply that they facilitate technological advancement but do not uniformly promote trade or research sophistication.
Governance Quality and Innovation Capability: Insights from Indonesia Hardi, Irsan; Majid, M. Shabri Abd.; Farlian, Talbani; Saleh, M.; Suriansyah, Andri; Syazalisma, Cut; Mose, Naftaly
Grimsa Journal of Business and Economics Studies Vol. 3 No. 1 (2026): January 2026 (In Press)
Publisher : Graha Primera Saintifika

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.61975/gjbes.v3i1.103

Abstract

Innovation is a key driver of national competitiveness, and its advancement increasingly relies on the strength of governance quality. However, empirical evidence linking governance performance to national innovation outcomes in the Indonesian literature remains limited. This study addresses this gap by assessing how the Worldwide Governance Indicators (WGI), used as a proxy for governance quality, affect Indonesia’s innovation capability as measured by the Global Innovation Index (GII). The analysis also incorporates additional factors that commonly influence innovation capabilities, including economic growth, foreign direct investment, and the labor force. By adopting a decomposition model to evaluate the individual contributions of each WGI dimension, and employing Gaussian Identity-link GLMs and robust least squares methods, the results show that governance quality overall has a positive and significant effect on Indonesia’s GII. When each component of the WGI is assessed individually, most dimensions display positive effects, with voice and accountability, political stability, and rule of law showing notably significant impacts. These findings imply that strengthening governance structures, particularly in transparency, stability, and legal certainty, is essential for advancing Indonesia’s innovation capability.
Co-Authors Bozkaya, Seyma Irsan Hardi M. Saleh M. Shabri Abd. Majid Siregar, Muhammad Ilhamsyah Suriansyah, Andri Syazalisma, Cut Talbani Farlian Tanchev, Stoyan