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INDONESIA
Economic and Finance in Indonesia
Published by Universitas Indonesia
ISSN : 0126155X     EISSN : 24429260     DOI : -
Core Subject : Economy, Education,
Economics, Econometrics & Finance Education
Aims & Scope 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. The journal covers specific areas, including but not limited to: Agricultural Economics Capital Market Demography Development Economics Economy in Crisis Economy of Rural Areas Education Economics Energy Economics Environmental and Natural Resources Economics Financial Sector Health Economics History of Economic Thoughts Industrial Economics Institutional Aspect of Economy International Economics Investment Labor Economics Maritime Economics Methodology of Economics Monetary Economics Political Economics Poverty Economics Public Policy Public Sector Economics Regional Economics Urban Economics
Arjuna Subject : Ilmu Ekonomi, Ekonometrika dan Keuangan (semua kategori) - Ilmu Ekomomi dan Ekonometrika
Articles 104 Documents
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The Role of Banking Services in Determining the Destination Countries for Indonesia's Non-Oil and Gas Export Satriani, Rini
Economics and Finance in Indonesia Vol. 66, No. 2
Publisher : UI Scholars Hub

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Abstract

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.
Constructing Indonesian Digital Economy Index in Determining Economic Policy Priorities amidst the Covid-19 Pandemic Sari, Diah Rukmana; Nasrudin, Nasrudin
Economics and Finance in Indonesia Vol. 68, No. 1
Publisher : UI Scholars Hub

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Abstract

The constant increase in the number of internet users in Indonesia amid a sluggish economy caused by the Large-Scale Social Restriction (PSBB) policy is a great opportunity for a digital-based economy. However, the unavailability of relevant macroeconomic statistical measurements inhibits the digital economy from being determined as a policy priority amidst the Covid-19 pandemic. This study offers an alternative measurement of the digital economy of Indonesia by establishing Digital Economy Index (DEI). This study discovers that digital economic activities in Indonesia have grown rapidly with an average growth of almost nine percent quarterly. On the other hand, this study also utilizes the established index to determine its effect on the economy using the Error Correction Model (ECM). The analysis reveals that DEI has not affected GDP in the short term, but it has significantly and positively in the long term. Therefore, the government can apply this digital economy index to describe the development of digital economic activities to support the digital economy as a priority for economic policy amidst the Covid-19 pandemic.
Household Size and Household Wealth in Indonesia with the Influence of Spatial Aspects Soseco, Thomas
Economics and Finance in Indonesia Vol. 68, No. 2
Publisher : UI Scholars Hub

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Abstract

Investigating household wealth should also include spatial analysis to capture the influence of location on the households’ net wealth and to avoid underestimation of the effect of the change of variables due to estimation that ignores spatial aspects. This paper examines factors influencing household net wealth in Indonesia with the influence of spatial lag using data from the Indonesian Family Life Survey (IFLS) for 1993–2014. The article relies on the Spatial Durbin Model (SDM) to analyze the data. Results show that household net wealth in Indonesia is spatially related to each other, and the spillover effect makes the change of household net wealth in Indonesia dominated by the change of variables in neighbouring regions. Furthermore, considering the time component, there is a positive effect of households’ size on households’ net wealth due to the time component concerning the spatial lag of the dependent and independent variables.
The Impact of COVID-19 Pandemic on Local Fiscal Revenue: Empirical Evidence from the Regions with Dominant Tertiary Sectors Jannah, Aisyah Nurrul; Khoirunurrofik, Khoirunurrofik
Economics and Finance in Indonesia Vol. 68, No. 2
Publisher : UI Scholars Hub

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Abstract

The COVID-19 crisis has devastatingly affected social and economic sectors, including service or tertiary sectors such as banking, insuran;ce, hospitality, telecommunications, and industrial services. The pandemic has also aggravated fiscal conditions along with the slowing economy. This paper aims to assess the impact of COVID-19 on local own-source revenue in regions with dominant tertiary sectors and to examine how a fiscal incentive policy can increase the local own-source revenue. We applied the difference-in-difference panel random effect method by estimating total revenue and local own-source revenue as the outcome variables. The treatment variable is the districts/cities with dominant tertiary sectors of more than 40%, while the control variable is otherwise. The time variables comprise 2018-2019 (before the COVID-19 crisis) and 2020 (at the time of the COVID-19 crisis). The results show that the COVID-19 pandemic causes a decline in total revenue by 2.18%. However, the local own-source revenue increases by 4.62%. In addition, the cross-sectional method was employed to observe the effect of fiscal incentives on local own-source revenue. The results indicate that fiscal incentives, albeit not statistically significant, increase local own-source revenue by 25.7%. It implies that the role of incentives is not yet optimal. The local revenue recovery is mostly due to the large tax base in the tertiary economic regions.
Economic Growth and CO2 Emission in ASEAN: Panel-ARDL Approach Feriansyah, Feriansyah; Nugroho, Hari; Larre, Aura Asyda; Septiavin, Qori’atul; Nisa, Cintya Khairun
Economics and Finance in Indonesia Vol. 68, No. 2
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Abstract

This paper investigates the relationship between economic growth and CO2 emissions from 1994 to 2018 using a panel approach from eight ASEAN countries. We found an established result using the Panel ARDL Pooled Mean Group method. First, the panel Cointegration analysis shows a significant long-term relationship between GDP and CO2 emissions. Second, the error correction mechanism shows a stable and consistent value. Third, we found that GDP has a significant long-term effect on CO2 emissions in ASEAN countries. Fourth, our results also show that GDP significantly impacts CO2 emissions in the short term for four countries: Indonesia, Malaysia, Thailand, and Cambodia. Based on these empirical results, implications and policy recommendations are presented. ASEAN countries should implement green growth policies by encouraging economic development which does not suppress the environment.
The Nonlinear Impact of Payment System Innovation on Financial System Stability in the ASEAN-4 Countries Ekananda, Mahjus
Economics and Finance in Indonesia Vol. 68, No. 2
Publisher : UI Scholars Hub

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Abstract

The increasing growth of financial system encourages payment system innovation that can affect financial system stability, particularly in ASEAN countries. This study explored a variety of payment system innovation, i.e. debit cards, credit cards, electronic money, and RTGS. The financial system stability index is measured by calculating the composite indexes of non-performing loans, Z-score from ROA and CAR, share price volatility, and yield bonds. The components of the indexes are structured to reflect risks from the banking, stock, and bond markets. The resulting index value indicates the level of risk in the financial system. A higher index specifies a higher risk and a more vulnerable financial system. Furthermore, it is noted that the effects of the independent variable can change according to economic conditions. The panel threshold model was applied to calculate the effects of various regimes, namely innovation, GDP, credit ratio, and stability index. The panel data were obtained from the ASEAN-4 countries (Indonesia, Malaysia, Thailand, and the Philippines) from 2012 to 2020. The panel threshold analysis shows an increase in the value of debit card, credit card, and RTGS transactions. Specifically, innovation and GDPR negatively affect the stability index. Increasing the value of payment system innovation will decrease the risk to financial system stability in ASEAN countries. The monetary authorities of each country can implement these findings by considering the rapid development of payment system innovation and the danger it may pose to financial system stability.
Measuring the Productivity of the Foods and Beverages Industries in Indonesia: What Factors Matter? Yasin, Mohamad Zeqi
Economics and Finance in Indonesia Vol. 67, No. 1
Publisher : UI Scholars Hub

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Abstract

The foods and beverages industries have shown the largest share of output in the manufacturing sector of Indonesia for more than a decade. This study aims to investigate its performance indicators through the growth of total factor productivity (TFP) and its determinants, such as imported raw materials, exports, absorptive capacity, firm size, market concentration, and capital ownership. This study employed firm-level panel data from 2008 - 2015 and the Growth Accounting method of Solow residual in addition to the fixed effects model to estimate TFP growth and its determinants. The results show that the foods and beverages industries in Indonesia showed positive TFP growth from 2008 - 2015. Moreover, variables of absorptive capacity, firm size, and market concentration promote the TFP growth of firms. Meanwhile, import intensity discourages TFP growth. However, within a certain threshold, firms with import activities perform better than non-importer firms. However, imports and exports may entail transfer of technology and knowledge and will be the bridge between the firms and the advanced market. This study recommends that policy makers increase the managerial capabilities of firms through a more massive training program as well as provide incentives to workers in the form of rewards or relief of income tax, while also improve product competitiveness through more intensive programs on the Indonesian National Standard (SNI) and the Domestic Component Level (TKDN).
Simultaneous Relationship between Financial Inclusion, Economic Growth, and Income Inequality in Sulawesi Island, 2011-2019 Nursaliyawati, Adella Siti; Oktora, Siskarossa Ika
Economics and Finance in Indonesia Vol. 68, No. 2
Publisher : UI Scholars Hub

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Abstract

Sulawesi Island has fairly high economic growth but is not followed by a significant decrease in income inequality. Therefore, a new strategy is needed to overcome these problems, one of them by increasing the role of the financial sector through financial inclusion. This study aims to analyze the relationship between financial inclusion, economic growth, and income inequality, as well as the factors influencing them in Sulawesi Island from 2011 to 2019. The analytical method used is the simultaneous equation model with panel data using the EC2SLS model. The results show that there is a simultaneous relationship between financial inclusion and economic growth and also between economic growth and income inequality. Economic growth has a positive and significant effect on financial inclusion. Financial inclusion, foreign direct investment, and government spending have a positive and significant effect, while income inequality has a negative and significant effect on economic growth. Financial inclusion and inflation have a positive and significant effect, while economic growth has a negative and significant effect on income inequality. Thus, this study can show that financial inclusion can reduce income inequality by promoting economic growth.
The Environmental Kuznets Curve for Deforestation in Indonesia Adila, Dara; Nuryartono, Nunung; Oak, Mandar
Economics and Finance in Indonesia Vol. 67, No. 2
Publisher : UI Scholars Hub

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Abstract

This study provides empirical findings on the relationship between deforestation and income in 32 provinces in Indonesia. To enrich the discussion on deforestation, this study investigates the impact of the factors of population, roundwood production, land area, and main crop production on deforestation. The selected main crops in Indonesia are oil palm, coffee, coconut, rubber, and cacao. The results confirm the existence of the EKC relationship between deforestation and income in Indonesia. The study also finds that oil palm production positively affects tree cover loss, but the production of natural rubber has the opposite impact on deforestation.
Energy and Economic Growth Nexus: A Long-run Relationship in Indonesia Darrian, Kelvan; Scholastica, Patricia; Kadarusman, Yohanes B.; Rafitrandi, Dandy
Economics and Finance in Indonesia Vol. 69, No. 1
Publisher : UI Scholars Hub

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Abstract

Energy plays an important role in economic growth in which it affects total factor productivity (TFP). Energy conservation efforts to address global climate change may adversely affect economic growth, particularly in the long run. This study analyses the short- and long-run relationship between energy consumption (both non-renewable (NREC) and renewable (REC)) and economic growth in Indonesia within the period of 1985 to 2019. Using the vector-error correction model (VECM), the paper discovered a short-run unidirectional causality from NREC and REC to economic growth. Economic growth in Indonesia is dependent on energy consumption. The finding proves the growth hypothesis in the energy and economic growth nexus (EGN). In the long run, only NREC has a unidirectional causality to economic growth, while REC is independent. REC supports the neutrality hypothesis rather than the growth hypothesis. The neutrality of REC in promoting economic growth in the long run indicates that Indonesia remains highly dependent on NREC to generate economic growth. Consequently, lowering NREC will adversely affect economic growth both in the short and long run. Nevertheless, Indonesia has signed a commitment to reduce carbon emissions vis a vis NREC in the context of climate change. The findings suggest that Indonesia should conduct energy transition toward REC, while conserving NREC in addition to accumulating physical and human capital to sustain high economic growth in the long run.

Page 10 of 11 | Total Record : 104

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