Sectoral Growth and Income Inequality in ASEAN-5 Countries: Case of Low-Middle Income Economies

Raeskyesa, Dewa Gede Sidan

doi:10.21512/jas.v8i1.6435

Cited by 6 publications

(8 citation statements)

References 28 publications

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“…Our results support past literature on the positive drivers of reducing income inequality that include economic globalization, fiscal capacity, agricultural sector growth, and per capita income (Bergh & Nilsson, 2010; Chen et al, 2016; Goñi et al, 2008; González Gordón & Resosudarmo, 2019; Ha et al, 2019; Raeskyesa, 2020). Ha et al (2019) found that an increase in per capita GDP reduces income inequality in Vietnam.…”

Section: Critical Discussion Of Resultssupporting

confidence: 90%

“…While the declining share of agriculture in GDP shows a negative impact on income inequality, the results also reveal that agricultural growth has been more inclusive than the other sectors. Similarly, Raeskyesa (2020) examines the effects of sectoral growth on income inequality in the Association of Southeast Asian Nations (ASEAN) countries. They found that a rise in the share of agricultural GDP reduces income inequality, mostly by increasing shares of forestry and fishing activities.…”

Section: Linkage Between Income Inequality and Sectoral Growthmentioning

confidence: 99%

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Do globalization progress and sectoral growth shifts affect income inequality? An exploratory analysis from India

Behera

Viswanathan

2022

Regional Science Policy & Practice

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This paper examines the effects of globalization (i.e., economic, social, and political) and sectoral growth shifts (i.e., changes in relative shares of agriculture, industry, and services) on income inequality in India from 1976 to 2012. We have used two unique datasets: the Standardized World Income Inequality Database (SWIID) and the KOF Globalization Index – Revisited, and employed the Stock and Watson Dynamic Ordinary Least Square cointegrating regression model for empirical estimation. This study finds that economic globalization reduces income inequality, while social and political globalization increases income inequality in India. Additionally, socioeconomic factors, such as per capita income, fiscal spending, and agricultural dependency are pertinent factors that reduce income inequality. On the contrary, factors such as rapid urbanization, changes in society, international interference in public policy, and rapid services sector growth that have been triggered by the social and political globalization processes show a detrimental effect on income inequality, which merits special attention in future development policies and actions. Additionally, the growth in agricultural value added helps reduce income inequalities in India, which is a desirable trend and justified on the grounds of continued rural dependence on the sector for income and employment. This underscores the need to strengthen the agricultural sector through strategies including crop diversification, value‐added processing, and investments for expansion of rural infrastructure, so that growth in the primary sector is sustained despite the decline in its relative contribution to gross domestic product (GDP).

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Section: Critical Discussion Of Resultssupporting

confidence: 90%

Section: Linkage Between Income Inequality and Sectoral Growthmentioning

confidence: 99%

Do globalization progress and sectoral growth shifts affect income inequality? An exploratory analysis from India

Behera

Viswanathan

2022

Regional Science Policy & Practice

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“…The expansion of hotel, restaurant, and agriculture cash crops requires land access to expand their economies. These findings should be taken into account as Indonesia has still sustained cash crops (e.g., coffee, cacao, and oil palm) as a significant economic export contribution (Neilson, Pritchard, Fold, & Dwiartama, 2018), and the agricultural sector is found to be significant to reduce the country's inequality (González-Gordon, Resosudarmo, 2019;Raeskyesa, 2020). Thus, this study underscores the prudent and holistic perspectives of observing the tourism sector and other economic sectors in Indonesia.…”

Section: Abstrakmentioning

confidence: 65%

“…One could assume that the tradeoff happens due to the factors of production competition, as the agriculture and tourism sector (hotels and restaurants) requires land for its activities. However, agricultural productivity improvement is still vital for the overall Indonesian economy, as it shows through the input-output analysis that the agriculture sector's output is an essential input for the tourism sector, and the agricultural sector is effective in reducing the country's inequality (González-Gordon et al 2019;Raeskyesa, 2020). In this context, it may be beneficial to consider Agri-Food tourism (Liu, Yen, Tsai, & Lo, 2017) and nature tourism (Allen, 2015).…”

Section: Conclusion and Recommendationmentioning

confidence: 99%

Analysis of the Tourism Sector in Indonesia Using the Input-Output and Error-Correction Model Approach

Hasudungan

Raeskyesa

Lukas

et al. 2021

JEBIK

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This research explores the role of the tourism sector in Indonesia, including its backward and forward linkages with other economic sectors. The tourism sector is represented by the hotel and restaurant (hospitality) industry. The study uses the input-output method and traces the econometric backward and forward shocks of the tourism sector with the Error Correction Model (ECM), using database from Statistics Indonesia from 2010 to 2019. The paper contributes to the existing literature by using multi-stage quantitative processes to observe backward and forward economic linkages. The result shows that manufacturing output contributes a significant and positive effect to the hotel and restaurant industry. At the same time, the tourism sector provides a significant and positive contribution to government retribution. Nonetheless, there is a negative relationship between the growth of the agriculture and tourism sector, which is assumed due to the tradeoff in the factor of production between the agricultural and tourism sector development. Consequently, backward and forward relationships suggest more holistic and prudent economic policies for observing interdependent tourism development in Indonesia's other economic sectors. ABSTRAKTujuan penelitian ini adalah menginvestigasi keterkaitan ke belakang dan ke depan antara sektor pariwisata dan sektor ekonomi lain di Indonesia. Pariwisata di sini di wakili sektor perhotelan dan restoran. Studi ini menggunakan metode input-output dengan data berasal dari database input output Bank Pembangunan Asia (ADB). Kedua, studi menelusuri keterkaitan ekonometrik ke depan dan ke belakang pariwisata dengan model koreksi kesalahan (ECM), menggunakan data triwulan dari PDB riil di database BPS dari tahun 2010 hingga 2019. Kontribusi makalah ini adalah proses multi-asesment untuk mengamati keterkaitan ekonomi ke belakang dan ke depan antara pariwisata dengan sektor ekonomi lainnya. Dari ekonometri tersebut, diketahui bahwa kontribusi output industry manufaktur berpengaruh signifikan dan positif terhadap industri hotel dan restoran. Selain itu, pariwisata memberikan kontribusi yang signifikan dan positif untuk retribusi pemerintah. Meskipun demikian, peningkatan output pariwisata datang dengan pengorbanan pengurangan output sektor pertanian. Hal ini dipengaruhi oleh kompetisi akses faktor produksi di antara kedua sektor tersebut. Hasil ini menekankan perlunya kebijakan ekonomi yang lebih holistik dan hati-hati terhadap saling ketergantungan antara pembangunan pariwisata dengan sektor ekonomi lain di Indonesia.

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“…This economic inequality has prevailed in the Indonesian economy (Hasudungan & Raeskyesa, 2021). Despite the significant economic growth, the regional convergence debates in Indonesia have been a vivid discussion among national and even global economists (Raeskyesa, 2020). With these heightening concerns, the paper aims to investigate the existence of regional convergence and determine factors of regional economic growth in Indonesia.…”

Section: Introductionmentioning

confidence: 99%

Regional Convergence between Western and Eastern Indonesia

Aurelia¹,

Permana²,

Hasudungan³

et al. 2022

JEP

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This article aims to investigate the existence and determinants of regional convergence of western and eastern Indonesia. Regional convergence itself is a condition where eventually, all regions will grow into one similar level of income. Previous studies seem to verify the existence of regional convergence. Based on previous regional economic scholarship. the regional convergence is signified with the significant relationship of past lag real GDP per capita with current GDP per capita. However, the increasing gap between western and eastern Indonesia in terms of GDP per capita brings into the critical issue of the possible attainment of the existence of regional convergence in Indonesia. In this paper, the fixed effect panel data regression method was utilized to determine the current state of Indonesia’s regional convergence process and to figure out the relationship of education, mining, and financial development to regional economic growth. From the study, regional convergence is found to be insignificant from 2010 to 2019. This study also managed to determine that financial development, mining contribution, the elementary, and high school enrollment rate is positively correlated with economic growth.

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Sectoral Growth and Income Inequality in ASEAN-5 Countries: Case of Low-Middle Income Economies

Cited by 6 publications

References 28 publications

Do globalization progress and sectoral growth shifts affect income inequality? An exploratory analysis from India

Do globalization progress and sectoral growth shifts affect income inequality? An exploratory analysis from India

Analysis of the Tourism Sector in Indonesia Using the Input-Output and Error-Correction Model Approach

Regional Convergence between Western and Eastern Indonesia

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