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INDONESIA
Journal of Indonesian Economy and Business
ISSN : 20858272     EISSN : 23385847     DOI : -
Core Subject : Economy,
Journal of Indonesian Economy and Business (JIEB) is open access, peer-reviewed journal whose objectives is to publish original research papers related to the Indonesian economy and business issues. This journal is also dedicated to disseminating the published articles freely for international academicians, researchers, practitioners, regulators, and public societies. The journal welcomes author from any institutional backgrounds and accepts rigorous empirical or theoretical research paper with any methods or approach that is relevant to the Indonesian economy and business content, as long as the research fits one of three salient disciplines: economics, business, or accounting.
Articles 989 Documents
CONVERGENCE OF INCOME AMONG PROVINCES IN INDONESIA,1984-2008: A PANEL DATA APPROACH Kharisma, Bayu; Saleh, Samsubar
Journal of Indonesian Economy and Business Vol 28, No 2 (2013): May
Publisher : Journal of Indonesian Economy and Business

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Abstract

This paper aims to analyze the income dispersion and test both absolute convergenceand conditional convergence of income among 26 provinces in Indonesia during 1984-2008 using static and dynamic panel data approach. Using the σ convergence analysisindicated that income dispersion measured by coefficient variation occurred in 1984-2008generally experienced fluctuation. Factors influencing income dispersion rate were theimpact of the economic crisis, the period of fiscal decentralization in Indonesia, the impactof the Bali bombing, impact of rising fuel prices in October 2005 and the earthquake inJogjakarta and Central Java. Dynamic panel data estimation with system GMM producedan efficient and consistent estimator to overcome the problems of instrument validity. Inaddition, it is also dedicated to minimize the risk of bias due to endogeneity problem.There was a strong indication of the existence of absolute convergence and conditionalconvergence among 26 provinces in Indonesia during 1984-2008. Thus, there wasevidence that the economy of poorer provinces tends to grow faster compared to the moreprosperous provinces, and this progress meant that there was a tendency to catch up.Based on the system GMM estimation, it is found that the provinces in Java havefasterspeed of convergence comparatively to those outside Java.Keywords: Income dispersion, absolute convergence, conditional convergence, systemGMM
THE 5 STRATEGY TO ENHANCE INDONESIA’S AGRO-BASED INDUSTRY COMPETITIVENESS Joewono, Handito Hadi
Journal of Indonesian Economy and Business Vol 23, No 1 (2008): January
Publisher : Journal of Indonesian Economy and Business

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Abstract

Within the period of 1995-2000, the international competitiveness of Indonesia agrobasedindustry sector had declined, down under the position of Thailand and China which areused as benchmark in this study. The decreasing of Indonesia domestic competitivenesswithin the same periode of time was more frustrated. This study was also find the linkage ofIndonesia agro-based industry sector to Thailand and China.This study had an objective to analyse the competitiveness position of agro-basedindustry sector in Indonesia by analysing input-output in some Asia’s countries, especiallybetween Indonesia, Thailand, and China. Specifically, the purpose of this study are : (1)Measuring the change of agro-based industry competitiveness in Indonesia, Thailand, andChina; (2) Analysing the linkage between agro-based industry sector in Indonesia with theeconomy of Thailand and China; and (3) Calculating and analysing structural growth factorsof agro-based industry sector in Indonesia, Thailand, and China.The analysis in this study used multilateral I-O model and data from Asian I-O Table1995 and 2000 to get the competitiveness score through IIC (Index of InternationalCompetitiveness) and IDC (Index of Domestic Competitiveness), inter-country linkages, keysector and sources of growth through structural decomposition.This study founds that Indonesia had no primary source of growth in agro-basedindustry that could be used in the future development. Structural growth factor in agro-basedindustry sector in Indonesia did not have a pattern, while Thailand was supported bytechnological change factor, and China was supported by export expansion factor.Based on the above findings, this study come to some recommendations to increaseIndonesia agro-based industry competitiveness as follows : (1) Developing agro-basedindustry as a key economic sector, (2) Increasing productivity, (3) Strengthening domesticcompetitiveness, (4) Increasing marketing-based competitiveness, (5) Developing technologybasedeconomy.Keywords: competitiveness, linkages, sources of growth, agro-based industry
THE IMPACT OF MANUFACTURING CONCENTRATION ON REGIONAL INEQUALITY: A CASE OF REGENCY IN JAVA REGION, INDONESIA Wahyudi, Setyo Tri; Jantan, Mohd Dan
Journal of Indonesian Economy and Business Vol 27, No 1 (2012): January
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Abstract

Concentration of manufacturing is an interesting topic in location of economic activity since manufacturing was the leading sector in the Indonesian economy. The previousstudies demonstrated that firms were localized in major metropolitan areas as well as a set of emerging regions. The paper aim to complement the findings of the previous studiesrelated to geographical concentration of manufacturing industry by exploring the impact of manufacturing concentration on regional inequality in the regency in Java during the 1998-2007. The Theil index and the location quotient index are employed in order to analysis the inequality and the location of manufacturing industry in Java region.The study found that the Theil index shows an increasing trend implying that the inequality of the manufacturing industry within regencies has increase. While, the inequality between regency shows a decreasing trend over the period of observation implying that the manufacturing industry in Java spreads only in several regencies. The location quotient index shows an increasing trend that reveals the economy of some regencies are more dependent in manufacturing industry and at the same time it shows that several new manufacturing areas has emerged in Java.Keywords: concentration, inequality, manufacturing, Java region
THE POLITICS OF BANK SUPERVISION Sukarman, Widigdo
Journal of Indonesian Economy and Business Vol 26, No 1 (2011): January
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Abstract

The bank supervision function and efficacy of monetary policy are often a trade-off for the central bank. An increasingly integrated financial system and the occurrence of bank crises during the 1980s raised the question: are central banks efficient in overseeing banks and is there a requirement for integrated supervision, either under the central bank or separate? The debate among academics and policymakers has never been settled without the guarantee that one alternative will ensure optimal bank supervision. This development has led to periodic changes in the form of supervision chosen. As the basic economic choice has been unsatisfactory, this study approaches the problem using path-dependence theory, which observes historical factors of bank development as well as the constellation of domestic politics in choosing these alternatives.Keywords: path-dependence, bank supervision, politics, country-specific
IMPACT OF PAKISTAN-MALAYSIA FTA ON INDONESIAN EXPORT OF REFINED BLEACHED DEODORIZED (RBD) OLEIN Kustiari, Reni; Rumagit, Grace
Journal of Indonesian Economy and Business Vol 24, No 3 (2009): September
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Abstract

Indonesia needs to increase its export products in order to maintain surplus balance of payment. However, Pakistan-Malaysia FTA could make Indonesian RBD Olein in adifficult situation. This paper aims to examine the impact of a decrease in import tariff of Malaysian RBD olein in Pakistan on Indonesian export of RBD Olein using Trade analysisemploying Armington model that distinguishes the product by the country of origin. RBD olein trade model consists of four endogenous countries and one exogenous rest of theworld (ROW). The endogenous countries are Indonesia, Malaysia, the United State of America and Pakistan. The results indicate that the reduction in import tariff of Malaysian RBD Olein by 10 percent will cause the price to decrease by around 7.3 percent. The decline in Malaysian RBD olein price will increase its demand in Pakistan by around 4.4 percent. While import demand of Indonesian RBD Olein in Pakistan estimated to increase by only 0.35 percent, this is because the price of Indonesian RBD Olein rises by 0.17percent. In other word, calculated based on the average of export volume and implicit price in the period 2005-2007, import of Indonesian RBD Olein in Pakistan will only increase by around 2.1 thousand tones, or US$ 1.03 million,.Keywords: tariff, import, export, Armington model.
EARNINGS ANNOUNCEMENTS AND COMPETING INFORMATION: THE INDONESIAN EVIDENCE Sulistiawan, Dedhy; Hartono, Jogiyanto; Tandelilin, Eduardus; Supriyadi, Supriyadi
Journal of Indonesian Economy and Business Vol 29, No 1 (2014): January
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Abstract

The main purpose of this study is to provide empirical evidence of the relationship betweeninvestors’ responses to two events, which are, (1) earnings anouncements, and (2) technicalanalysis signals, as competing information. This study is motivated by Francis, et al. (2002),whose study used stock analyst’s recommendations as competing information in the U.S stockmarket. To extend that idea, this study uses technical analysis signals as competing informationin the Indonesian stock market. Using Indonesian data from 2007-2012, this study shows thatthere are price reactions on the day of a technical analysis signal’s release, which is prior toearnings announcements. It means that investors react to the emergence of competinginformation. Reactions on earnings announcements also produce a negative relationship withthe reaction to a technical analysis signal before an earnings announcement. This study givesevidence about the importance of technical analysis as competing information to earningsannouncements.Keywords: competing information, earnings announcements, technical analysis, price reaction
The Transaction Cost of Sugarcane Farmers: An Explorative Study Yustika, Ahmad Erani
Journal of Indonesian Economy and Business Vol 23, No 3 (2008): July
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Abstract

Industri gula sampai kini masih menjadi prioritas dalam pembangunan sektor pertanian di Indonesia, khususnya di Jawa Timur. Tetapi, kinerja industri gula di Jawa timur dalam dua dekade ini cenderung menurun, yang antara lain dapat dilihat dari penurunan jumlah produksi. Penelitian ini menggunakan analisis ekonomi biaya transaksi untuk mengidentifikasi masalah industri gula di Jawa Timur. Riset ini mengkomparasikan biaya transaksi antara petani tebu kontrak dan non-kontrak di Kabupaten Malang dan Kediri (Jawa Timur). Secara lebih detail, studi ini memperlihatkan bahwa ongkos untuk mengorganisasi tebang-muat-angkut (TMA) (termasuk biaya karung) berkontribusi paling tinggi dari total biaya transaksi petani tebu, baik berdasarkan lokasi, tipe petani, maupun luas lahan. Jika dianalisis lebihdetail, ditemukan fakta-fakta sebagai berikut: (i)biaya transaksi TMA lebih besar petani tebu kontrak daripada non-kontrak; (ii) biaya komisi yang diberikan kepada perantara lebih besar petani tebu non-kontrak daripada kontrak; dan (iii) proporsi bunga kredit terhadap total biaya transaksi pada petani tebu kontrak cukup tinggi karena sering terjadi keterlambatan penyaluran kredit, di samping fakta bahwa rata-rata jumlah kredit petani tebu kontrak lebih besar ketimbang non-kontrak.Key words: institutional economics, transaction costs, contract and non-contract sugarcane farmers, East Java
BANKING MARKET DISCIPLINE IN INDONESIA AN EMPIRICAL TEST ON CONVENTIONAL AND ISLAMIC BANK Hasan, Hasan; Tandelilin, Eduardus
Journal of Indonesian Economy and Business Vol 27, No 2 (2012): May
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Abstract

A sound banking system is vital in supporting a sound and strong economy. One of the important pillars of a sound banking system is market discipline, which is the reaction ofthe market makers on the risks taken by banks as a form of supervision and discipline. The objectives of this paper are to examine: (i) the existence of market discipline by depositors in the deposit insurance era by the Indonesia Deposit Insurance Corporation (LPS); (ii) the difference in market discipline by depositors before and after the policy of increasing the value of deposit covered; (iii) the difference between market discipline by depositors of Islamic banks with conventional banks. The data used are annually individual bank data from the Indonesian Banking Directory (DPI) in 2005-2009. The dependent variable is the change in deposits, which is used as proxy for market discipline in t period. The independent variables used are CAR, APB, NIM, and LDR as proxy of financial risk/fundamental condition of the bank in t-1 period. The result indicates the existence ofmarket discipline in Indonesia and also shows that market discipline is detected stronger in the period 2005-2007 than the period 2008-2009. This study also indicates that marketdiscipline by depositors of Islamic banks are stronger than those of conventional.Keywords: market discipline, deposit insurance, Islamic and conventional banks.
THE RISE OF CHINA AND ITS IMPLICATION ON INDONESIA-UNITED STATES TRADE Putriani, Diyah; Azzani, Meikha
Journal of Indonesian Economy and Business Vol 26, No 2 (2011): May
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Abstract

The purpose of this study is to analyze the impact of Chinese renminbi exchange rate againts the United States (US) dollar, on the bilateral export of Indonesia to the US.Johansen cointegration test and Ordinary Least Square (OLS) regression are employed to examine one impact. This research is limited only in the long-run aspect. The Johansentest shows that there are long-run relationships amongs variables involved such as GDP, Real Exchange Rate (RER), RER Volatility, and dummy variables. Empirical test resultshows that there are positive significant impacts of the Chinese renminbi on the Indonesia’s exports to the US, implying that the relationship between Chinese exports andIndonesia export are complementary in the US market.Keywords: Indonesia, China, the United States, renminbi, cointegration, OLS 
INFRASTRUCTURE POLICY IN INDONESIA: NEW DIRECTIONS McCawley, Peter
Journal of Indonesian Economy and Business Vol 25, No 1 (2010): January
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Abstract

Indonesia faces an infrastructure crisis. The infrastructure crisis is part of a broader challenge of mobilising investment capital to support overall development. The basicarguments of this article are as follows. First, long-term development in Indonesia will be held back unless increased amounts of priority infrastructure can be provided. Second, the required infrastructure projects will not be constructed unless bottlenecks holding back the investments can be overcome. Third, bottlenecks appear to fall into two main types: financial and real constraints to growth. Fourth, more emphasis on a commercial approach to the provision of infrastructure in Indonesia which emphasises competitionand responsiveness to stakeholders is needed.Keywords: infrastructure; finance; markets; prices

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