TRENDS AND DETERMINANTS OF THE GEOGRAPHIC DISTRIBUTION OF ECONOMIC ACTIVITIES: EVIDENCE FROM INDONESIAN MANUFACTURING

Khoirunurrofik Khoirunurrofik

Abstract


The paper analyzes the trends and determinant factors vis-à-vis spatial distribution in Indonesian manufacturing during the period of 1990–2010. There is a long-term increasing trend of regional specialization driven by core regions within Java and by affluent regions outside of Java. Among resource-based and labor-intensive industries, there is a smoothly declining trend of geographic concentration. An increasing trend in regional specialization and geographic concentration during the economic crisis is identified, which turns into a decreasing trend at the onset of setting up a decentralization policy and then again pushed upward. Finally, by applying spatially weighted Ellison-Glaeser (EG) Index, it is found that labor skills, export activities, and wage rates strongly determine the degree of agglomeration among Indonesian manufacturing industries.

Keywords: Agglomeration, Asian financial crisis, decentralization, regional specialization, geographic concentration, global economy.

JEL: R11, R12, R14,R30

Keywords


Agglomeration, Asian financial crisis, decentralization, regional specialization, geographic concentration, global economy

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DOI: http://dx.doi.org/10.21776/ub.jiae.2017.007.01.2

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