Industries Development with the Input-Output Analysis: Investment Simulation on Two Regencies in Indonesia
DOI:
https://doi.org/10.17059/ekon.reg.2023-1-17Keywords:
economic development planning, input-output analysis, Leontief multiplier, Leontief production function, investment policy simulation, economic structure, inward-outward oriented planning, industrialisation strategy, backward linkage, forward linkageAbstract
The similarity of the industrial structure of the main industries in two neighboring regencies, Wonosobo and Temanggung, Indonesia, is expected to result in equality demand for intermediate and primary inputs. The neighbouring regencies are located in the mountainous area and had similarities in economic structure. The goals of this study were to analyse the economic structure, select 5 main sectors in each district, and compare the impact of the economic investment on the main sectors in order to identify the effectiveness of the investment in the same production sector in the context of its impact on the economy. This research employed independent Input-Output analysis using the 2016 Input-Output Tables of Wonosobo and Temanggung regencies to evaluate the flow of intersectoral transactions and develop a multiplier analysis to determine development strategies which are shock injections applied to each region. This study hypothesises that the increase of sectoral investments increases output which is relatively the same in 5 corresponding industries in both regions. The obtained results showed that the selected main sector included Trade, Other Food and Beverage Industries, Building, and Wood and Wood Materials Industries. The investment on the main industrial sector led to a higher improvement in Temanggung rather than in Wonosobo. By simulating investment policies in two adjoining regencies, the optimally economic impact on each region and the cooperation approach used to carry out development planning can be assessed.
Keywords: economic development planning, input-output analysis, Leontief multiplier, Leontief production function, investment policy simulation, economic structure, inward-outward oriented planning, industrialisation strategy, backward linkage, forward linkage
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About the authors
Firmansyah — Dr. Sci. (Econ.), Associate Professor of the Faculty of Economics and Business, Diponegoro University; Scopus Author ID: 57191416184; https://orcid.org/0000-0003-3424-2545 (H. Prof. Soedarto St., Tembalang, Semarang, 50275, Indonesia; e-mail: firman.undip@gmail.com).
Shanty Oktavilia — Dr. Sci. (Econ.), Senior Lecturer of the Faculty of Economics, Universitas Negeri Semarang; Scopus Author ID: 57191409480; https://orcid.org/0000-0003-4602-6938 (L1, Kampus Sekaran, Gunungpati, Semarang, 50229, Indonesia).
Sri Handayani — Dr. Sci. (Educational Management), Lecturer of the Faculty of Management and Business, Institut Transportasi dan Logistik Trisakti; https://orcid.org/0000-0001-7339-3595 (2, IPN St., Cipinang Besar Selatan, East Jakarta, Indonesia).
