•  
  •  
 

Abstract

Indonesia has an economic transformation. However, it tends to experience deindustrialization and development inclusivity challenges. This research examines the influence of industrialization and inclusivity to improve welfare in the short and long term. The analytical method is Autoregressive Distributed Lag, using province-level panel data from 2012–2021. Based on results, industrialization has not significantly affected welfare improvement in the short term. Inclusivity has no significant impact in the short term, but it has a negative direction. However, in the long term, industrialization and inclusivity positively and significantly increase welfare. This confirms that industrialization and inclusivity require time to create welfare.

Bahasa Abstract

Indonesia mengalami transformasi ekonomi. Namun, Indonesia mengalami tantangan deindustrialisasi dan inklusivitas pembangunan. Penelitian ini bertujuan untuk mengkaji pengaruh industrialisasi dan inklusivitas terhadap peningkatan kesejahteraan dalam jangka pendek dan panjang. Metode analisis yang digunakan adalah Autoregressive Distributed Lag, menggunakan data panel provinsi tahun 2012–2021. Berdasarkan hasil penelitian, dalam jangka pendek, industrialisasi tidak berpengaruh signifikan terhadap peningkatan kesejahteraan. Inklusivitas tidak berpengaruh signifikan, akan tetapi memiliki arah negatif. Dalam jangka panjang, industrialisasi dan inklusivitas berpengaruh positif signifikan terhadap peningkatan kesejahteraan. Artinya, industrialisasi dan inklusivitas membutuhkan waktu untuk menciptakan kesejahteraan.

References

[1] Acemoqlu, D., & Robinson, J. A. (2013). Why nations fail: The origins of power, prosperity and poverty. Profile Books.

[2] Adésínà, J. O. (2009). Social policy in sub-Saharan Africa: a glance in the rear-view mirror. International Journal of SocialWelfare, 18, S37-S51. doi: https://doi.org/10.1111/j.1468- 2397.2009.00629.x.

[3] Afriliana, S. N. & Wahyudi, S. T. (2022). Analisis pertumbuhan ekonomi inklusif: studi komparasi antar provinsi di Indonesia. Journal of Development Economic and Social Studies, 1(1), 44-57. doi: http://dx.doi.org/10.21776/jdess.2022.01.1.5.

[4] Ahmed, F., Ali, I., Kousar, S., & Ahmed, S. (2022). The environmental impact of industrialization and foreign direct investment: empirical evidence from Asia-Pacific region. Environmental Science and Pollution Research, 29, 29778–29792. https://doi.org/10.1007/s11356-021-17560-w.

[5] Askarova, M., Saddulaev, T., & Radjabov, B. (2021). Possibilities and challenges of inclusive economic growth in countries. E3S Web of Conferences, 244, 10039. doi: https:// doi.org/10.1051/e3sconf/202124410039.

[6] Azam, A., Rafiq, M., Shafique, M., Ateeq, M., & Yuan, J. (2021). Investigating the impact of renewable electricity consumption on sustainable economic development: a panel ARDL approach. International Journal of Green Energy, 18(11), 1185-1192. doi: https://doi.org/10.1080/15435075.2021.1897825.

[7] Bao, H., Fang, Y., Ye, Q., & Peng, Y. (2018). Investigating social welfare change in Urban Village transformation: a rural migrant perspective. Social Indicators Research, 139, 723-743. doi: https://doi.org/10.1007/s11205-017-1719-9.

[8] Becker, M. C., & Knudsen, T. (2002). Schumpeter 1911: farsighted visions on economic development. American Journal of Economics and Sociology, 61(2), 387-403. doi: https://doi.org/10.1111/1536-7150.00166.

[9] BPS. (2023). Jumlah industri pengolahan besar dan sedang, Jawa dan luar Jawa. Badan Pusat Statistik. Diakses 20 November 2023 dari https://www.bps.go.id/id/statistics-table/2/NzMyIzI= /jumlah-industri-pengolahan-besar-dan-sedang--jawa-danluar- jawa.html.

[10] Cook, S. (2006). Structural change, growth and poverty reduction in Asia: Pathways to inclusive development. Development Policy Review, 24, s51-80. doi: https://doi.org/10.1111/j.1467-7679.2006.00341.x.

[11] Dartanto, T. (2013). Why is growth less inclusive in Indonesia?. MPRA Paper, 65136. Munich Personal RePEc Archive. Diakses 20 November 2023 dari https://mpra.ub.uni-muenchen.de/65136/.

[12] Deichmann, U., Goyal, A., & Mishra, D. (2016). Will digital technologies transform agriculture in developing countries?. Agricultural Economics, 47(S1), 21-33. doi: https://doi.org/10.1111/agec.12300.

[13] de la Escosura, L. P., & Rosés, J. R. (2009). The sources of longrun growth in Spain, 1850-2000. The Journal of Economic History, 69(4), 1063-1091. doi: doi:10.1017/S0022050709001387.

[14] Enders, W. (2004). Applied econometric time series (4th edition). John Willey & Sony, Inc.

[15] Ginting, A. M. (2016). Pengaruh ketimpangan pembangunan antarwilayah terhadap kemiskinan di Indonesia 2004-2013. Kajian, 20(1), 45-58. doi: http:// dx.doi.org/10.22212/kajian.v20i1.569.

[16] Gupta, J., Pouw, N. R., & Ros-Tonen, M. A. (2015). Towards an elaborated theory of inclusive development. The European Journal of Development Research, 27, 541-559. doi: https://doi.org/10.1057/ejdr.2015.30.

[17] Gupta, J., Bavinck, M., Ros-Tonen, M., Asubonteng, K., Bosch, H., van Ewijk, E., ... & Verrest, H. (2021). COVID-19, poverty and inclusive development.World Development, 145, 105527. doi: https://doi.org/10.1016/j.worlddev.2021.105527.

[18] Hartati,Y. S. (2021). Analisis pertumbuhan ekonomi inklusif di Indonesia. Jurnal Ekonomi dan Bisnis, 12(1), 79-92. doi: https://doi.org/10.55049/jeb.v12i1.74.

[19] Irmanelly, I., Amir, A., Zamzami, Z., & Syaparuddin, S. (2022). Economic growth inclusivity in Sumatra Province. Budapest International Research and Critics Institute-Journal (BIRCI-Journal), 5(1), 105-113. doi: https://doi.org/10.33258/birci.v5i1.3583.

[20] Kristyanto, V. S., & Kaluge, D. (2018). Peningkatan inklusivitas ekonomi melalui pembiayaan investasi modal manusia. Jurnal Ekonomi Kuantitatif Terapan, 11(2), 182-189. doi: https://doi.org/10.24843/JEKT.2018.v11.i02.p04.

[21] Kuznets, S. (1955). Economic growth and income inequality. The American Economic Review, 45(1), 1-28. http:// www.jstor.org/stable/1811581.

[22] Lee, N., & Sissons, P. (2016). Inclusive growth? The relationship between economic growth and poverty in British cities. Environment and Planning A: Economy and Space, 48(11), 2317-2339. doi: https://doi.org/10.1177/0308518X16656000.

[23] Li, J., Luan, S., Jiang, B., & Gong, Y. (2023). Industrialization process evaluation of marine economy in China. Ocean & Coastal Management, 231, 106416. doi: https:// doi.org/10.1016/j.ocecoaman.2022.106416.

[24] Liu, X., Schwaag Serger, S., Tagscherer, U., & Chang, A. Y. (2017). Beyond catch-up—can a new innovation policy help China overcome the middle income trap?. Science and Public Policy, 44(5), 656-669. doi: https://doi.org/10.1093/scipol/scw092.

[25] Lugina, E. J., Mwakalobo, A. B. S., & Lwesya, F. (2022). Effects of industrialization on Tanzania’s economic growth: a case of manufacturing sector. Future Business Journal, 8, 62. doi: https://doi.org/10.1186/s43093-022-00177-x.

[26] Mallawaarachchi, T., & Rahut, D. B. (2023). Realising rural economic transformation: Pathways to inclusive and sustainable prosperity in post-COVID-19 Asia. Economic Analysis and Policy, 77, 1076-1082. doi: https://doi.org/10.1016/j.eap.2023.01.009.

[27] McMillan, M., Rodrik, D., & Verduzco-Gallo, Í. (2014). Globalization, structural change, and productivity growth, with an update on Africa. World Development, 63, 11-32. doi: https://doi.org/10.1016/j.worlddev.2013.10.012.

[28] Ndiaya, C., & Lv, K. (2018). Role of industrialization on economic growth: the experience of Senegal (1960-2017). American Journal of Industrial and Business Management, 8(10), 2072-2085. doi: 10.4236/ajibm.2018.810137.

[29] Obioma, B. K., Uchenna N., A., & Alexanda O. U., K. (2015). The effect of industrial development on economic growth (an empirical evidence in Nigeria 1973-2013). European Journal of Business and Social Sciences, 4(2), 127-140.

[30] Patnaik, R. (2018). Impact of industrialization on environment and sustainable solutions–reflections from a south Indian region. IOP Conference Series: Earth and Environmental Science, 120, 012016. doi: https://doi.org/10.1088/1755-1315/120/1/012016.

[31] Pesaran, M. H. (2004). General diagnostic tests for cross section dependence in panels. Cambridge Working Papers in Economics, 0435. Faculty of Economics, University of Cambridge. Diakses 20 November 2023 dari http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe0435.pdf.

[32] Pesaran, M. H. (2006). Estimation and inference in large heterogeneous panels with a multifactor error structure. Econometrica, 74(4), 967-1012. doi: https://doi.org/10.1111/j.1468- 0262.2006.00692.x.

[33] Pujiati, A., & Imron, M. (2020). The effect of industrial existence on the environment and socio-economy. Economics Development Analysis Journal, 9(1), 12-22. doi: https:// doi.org/10.15294/edaj.v9i1.37261.

[34] Pukuh, N., & Widyasthika, H. F. (2017). When growth is inclusive in Indonesia?. Jurnal Perencanaan Pembangunan, 1(3), 195-209. doi: https://doi.org/10.36574/jpp.v1i3.19.

[35] Rammelt, C. F., & Gupta, J. (2021). Inclusive is not an adjective, it transforms development: A postgrowth interpretation of Inclusive Development. Environmental Science & Policy, 124, 144-155. doi: https:// doi.org/10.1016/j.envsci.2021.06.012.

[36] Rante, S. V. N., Helaluddin, Wijaya, H., Tulak, H., & Umrati. (2020). Far from expectation: A systematic literature review of inclusive education in Indonesia. Universal Journal of Educational Research, 8(11B), 6340-6350. doi: 10.13189/ujer.2020.082273.

[37] Rini, D. L., & Tambunan, T. T. H. (2021). Inclusive growth and its determinants recent evidence from Indonesia with provincial data. Annals of Social Sciences & Management Studies, 6(2), 555682. doi: 10.19080/ASM.2021.06.555682.

[38] Rostow,W.W. (1990). The stages of economic growth: A noncommunist manifesto. Cambridge University Press. [39] Sen, A. (1999). Development as freedom. Oxford University Press.

[40] Simatupang, B. (2012). Economic transformation and liberalization in Indonesia. In: Jilberto, A. E. F., & Mommen, A. (eds.), Liberalization in the developing world: institutional and economic changes in Latin America, Africa and Asia (pp. 65-85). Routledge.

[41] Timmer, P., McMillan, M., Badiane, O., Rodrik, D., Binswanger-Mkhize, H., & Wouterse, F. (2012). Patterns of growth and structural transformation in Africa: Trends and lessons for future development strategies. Thematic Research Note, 02. International Food Policy Research Institute. Diakses 20 Desember 2023 dari https://www.ifpri.org/publication/patterns-growth-and-structural-transformation-africa.

[42] Walker, C. C., Druckman, A., & Jackson, T. (2021). Welfare systems without economic growth: A review of the challenges and next steps for the field. Ecological Economics, 186, 107066. doi: https:// doi.org/10.1016/j.ecolecon.2021.107066.

[43] World Bank. (2023). Gini index - Indonesia.Worldbank Group. Diakses 20 Desember 2023 dari https://data.worldbank.org/ indicator/SI.POV.GINI?locations=ID.

Download

Included in

Economics Commons

Share

COinS
 
 

To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.