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Economics and Finance in Indonesia

efi
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Published by Universitas Indonesia

ISSN : 0126155X EISSN : 24429260 DOI : 10.47291

Core Subject : Economy,

Economics, Econometrics & Finance

EFI mainly covers original idea related to the Economics and Finance in Indonesia. Published articles can be either theoretical, empirical, or in between of those two polar variants.

Arjuna Subject : -

Articles 8 Documents

Search results for , issue "Volume 66, Number 2, December 2020" : 8 Documents clear

The Impact of Disparity in Infrastructure Development on Aceh’s Economic Performance: An Inter-Provincial Analysis Mutiara Fahmi; Sahara Sahara; Yeti Lis Purnamadewi
Economics and Finance in Indonesia Volume 66, Number 2, December 2020
Publisher : Institute for Economic and Social Research

This study provides empirical findings on regional disparity in infrastructural facilities in 23 districts/municipalities of Aceh Province and the impact of the disparity on the economic performance of Aceh Province, specifically on those of economic growth, poverty, and unemployment. The unit of analysis is the district level and the Infrastructure Development Index (IDI) is used as the variable computed by using the multivariate method. Regional disparity is measured by the Coefficient of Variation and the impact of IDI on the province’s economy is analyzed using the econometric model. The analysis shows that infrastructure development disparity exists and that IDI generally affects the economic performance in Aceh Province. Specifically, the results reveal that electricity provision, the number of hotels, and the length of road positively correlate with economic performance. However, the number of Base Transceiver Stations, the number of markets, and the number of banks do not necessarily lead to higher economic performance. The policy implications of the findings are discussed.

Business Vulnerability and Credit Access for Agriculture-Based Micro and Small Women Entrepreneurs Dewi Ratna Sjari Martokoesoemo; Bonar M. Sinaga; Nunung Kusnadi; Yusman Syaukat
Economics and Finance in Indonesia Volume 66, Number 2, December 2020
Publisher : Institute for Economic and Social Research

Micro and Small Industries (MSIs) constitute the largest share of Indonesia’s manufacturing sector and play an important role in providing employment opportunities and value-added creation. However, their business sustainability and scaling up are often hindered by various factors, one of which is access to credit. The subsidized loan scheme provided by the government, namely People’s Business Credit (KUR), appears to be insufficiently attractive to entrepreneurs, especially to Micro and Small Women Entrepreneurs (MSWEs). Employing a logit regression method and utilizing the BPS-Statistics Indonesia’s 2015 MSI survey data, this study aims to investigate factors affecting MSWEs’ decision to apply for bank loans and factors contributing to the approval of their credit applications by banks. The results show that MSWEs have low participation in credit borrowing, partially due to business vulnerability and self-rationing attitude, while credit application rejection is caused mainly by banks’ conservative approach to MSWEs. Practical implications of the findings are discussed.

Public Health Spending, Governance Quality and Poverty Alleviation Mohamad Komarudin; Mandar Oak
Economics and Finance in Indonesia Volume 66, Number 2, December 2020
Publisher : Institute for Economic and Social Research

Poverty alleviation has become the main priority program in most developing countries. This research empirically studies the correlation between public health spending, governance quality, and poverty alleviation in developing countries. The panel data were estimated via a random-effects (RE) model and robustness check using instrumental variables (IV) (two-stage least-squares [2SLS]) and first-difference generalized method of moments (GMM) because of the endogeneity problem. The results suggest that public health spending has a significant effect on reducing the poverty rate, and that countries with better governance tend to reduce poverty than countries with poor governance. Increasing public health spending by one percentage point may reduce poverty by 0.48 percentage points in countries with good governance supposing the governance quality influences public health spending. Conversely, in countries with poor governance, the poverty headcount ratio may decline by 1.375 percentage points when public health spending increases by one percentage point.

A Decomposition Analysis of Fertility: Evidence from DKI Jakarta and East Nusa Tenggara Farma Mangunsong
Economics and Finance in Indonesia Volume 66, Number 2, December 2020
Publisher : Institute for Economic and Social Research

Fertility control has been one of the priorities of development in Indonesia. However, the 2000 and 2010 population censuses showed an increase in fertility indicators. To identify the sources of increased fertility in developed and less developed areas, DKI Jakarta and East Nusa Tenggara Provinces were selected for comparison. Using 2000 and 2010 census data, the decomposition analysis shows that the increase in Total Fertility Rate (TFR) of DKI Jakarta was dominated by the increase in nuptiality rate, while the increase in TFR of East Nusa Tenggara was mainly caused by the increase in Marital Fertility Rate (MFR). The highest increase in the proportion of married women in DKI Jakarta occurs in the age group of 15-19 years old, followed by the age group of 20–24 years old. The increase in MFR in East Nusa Tenggara occurs in nearly all age groups, particularly in the age groups of 30–34 and 35–39 years old. Identifying the sources of the increase in TFR is important for population policy to support population growth control, fertility reduction, and human resource quality improvement. The main suggestions based on the findings are the promotion of higher educational level and the benefits of postponing marriage among the younger age groups in DKI Jakarta as well as the use of contraceptive methods to control birth rate in East Nusa Tenggara.

The International Tourism Performance Amidst Several Intervention Events: More than 20 Years of Multi Input Intervention Analysis in Bali, Jakarta, and Kepulauan Riau Provinces Taly Purwa; Eviyana Atmanegara
Economics and Finance in Indonesia Volume 66, Number 2, December 2020
Publisher : Institute for Economic and Social Research

As one of the priority sectors in economic development of Indonesia, tourism is expected to be the main key in accelerating economic and social growth, hence reducing poverty. The tourism performance, especially international tourism market, is highly prone to intervention events that can reduce the number of inbound tourists and produce a negative impact on economic development of the destination country. Therefore, anticipating and mitigating various intervention events is necessary to maintain the performance of the tourism sector in Indonesia. This study investigates the magnitude and patterns of impact of several intervention events on the number of international visitor arrivals via the three main ports of entry of Indonesia, i.e. Soekarno-Hatta Airport, Ngurah Rai Airport, and Batam Port. The multi input intervention models were constructed by covering intervention events, i.e. terrorism, disease pandemic, global financial crisis, natural disaster, and government policy, occurring in a relatively long time span, more than two decades, from January 1999 to August 2020. The results show that an intervention event does not always have a significant impact on the number of international visitor arrivals at the three main ports of entry. Generally, all intervention events can lead to a decrease in the number of international visitor arrivals but with different magnitude and pattern, with the biggest and longest impact is caused by COVID-19 pandemic. The direct or non-delayed pattern of impact only appears for terrorism and natural disaster that affect the number of international visitor arrivals via Ngurah Rai Airport.

Financial Reporting Quality and Investment Efficiency: Evidence from Indonesian Stock Market Hanif Putra Ardianto; Iman Harymawan; Yuanita Intan Paramitasari; Mohammad Nasih
Economics and Finance in Indonesia Volume 66, Number 2, December 2020
Publisher : Institute for Economic and Social Research

This study aims to analyze the impact of financial reporting quality on the investment efficiency of a company. The study uses 994 observations from companies listed on the Indonesia Stock Exchange (IDX) in three periods from 2013 to 2015. The findings suggest that higher financial reporting quality has a positive and significant relationship with investment efficiency. Furthermore, the tests were conducted on groups of companies experiencing underinvestment and overinvestment. It was found that higher financial reporting quality had a negative and significant relationship with companies experiencing overinvestment. The findings provide implications for investors in assessing investment management carried out by company.

The Role of Banking Services in Determining the Destination Countries for Indonesia’s Non-Oil and Gas Export Rini Satriani; T. M. Zakir Machmud
Economics and Finance in Indonesia Volume 66, Number 2, December 2020
Publisher : Institute for Economic and Social Research

This study aims to examine whether the risk factor and banking services play a significant role in determining not only the export performance of a country but also the pattern of export destination markets, with the reference to the case of Indonesia. These two indicators are interrelated because the risk factor in export transactions can be mitigated by banking sector. Using the data of export Letter of Credits (LCs) for non-oil and gas exports of Indonesia as a banking instrument to mitigate special risk transactions to 102 export destination countries as well as a panel data methodology for the 2011–2018 period, this study discovers that the risk of export destination countries affects the decline in non-oil and gas exports of Indonesia to the alleged high-risk countries that are non-traditional export markets of Indonesia by 8.34%. In contrast, the LCs only significantly affect the increase in non-oil and gas exports of Indonesia to the lowand medium-risk countries by 0.024–0.029%, most of which are traditional export markets of Indonesia. It implies that banking sector in general does not have the appetite for providing financing for Indonesian exporters attempting to penetrate non-traditional export markets. This result underlines that commercial banks in Indonesia have a significant role in shaping the pattern of destination countries for Indonesian export. Consequently, government intervention is essentially needed by assuming or sharing part of the risk with state banks supposing the government continues to expect exporters to be able to penetrate into the non-traditional countries.

Should I Bribe? Re-Examining the Greasing-the-Wheels Hypothesis in Democratic Post-Soeharto Indonesia Irfan Kurniawan; Riyanto Riyanto
Economics and Finance in Indonesia Volume 66, Number 2, December 2020
Publisher : Institute for Economic and Social Research

During the Soeharto Era corruption was considered to grease the wheels of growth in Indonesia, a country once considered to be the most corrupt country in the world. Indonesia began to experience instantaneous decentralization and democratization after the Soeharto Era abruptly ended. While vastly celebrated, these episodes have their unintended consequence: coercive regulation. We employed the extensive firm-level Large and Medium Manufacturing (Industri Besar Sedang/IBS) census data combined with the Indonesian Democracy Index (Indeks Demokrasi Indonesia/IDI) at provincial level spanning from 2009 to 2015 and found that bribery hampered Indonesian firm output and productivity growth by 9.8% and 12.6%, respectively. These results suggest that the greasing effect has now diminished. Interestingly, we also found that firms located in a province with a better democracy index may experience less damaging effects of corruption. In other words, two firms paying the same value of bribe may obtain different effects depending on where they are located.

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Home Page

OAI Link

Editorial Team

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Journal Mail Official efi@lpem-feui.org

Editorial Address "Editorial Office of Economics and Finance in Indonesia (EFI) Institute for Economic and Social Research (LPEM-FEUI) Jl. Salemba Raya No. 4, Jakarta, Indonesia Phone: +62-21-3143177; Fax: +62-21-31934310"

Location Kota depok, Jawa barat INDONESIA

Abstract

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Abstract

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Abstract

Contact Name
-

Contact Email
-

Phone
-

Journal Mail Official
efi@lpem-feui.org

Editorial Address
"Editorial Office of Economics and Finance in Indonesia (EFI) Institute for Economic and Social Research (LPEM-FEUI) Jl. Salemba Raya No. 4, Jakarta, Indonesia Phone: +62-21-3143177; Fax: +62-21-31934310"

Location
Kota depok,

Jawa barat

INDONESIA