Narrow Results

This study investigates the impact of green open spaces in reducing the probability of flooding and open waste burning in urban areas in Indonesia’s three largest metropolitan cities: Surabaya, Jakarta, and Medan. This study employs urban village microdata from the 2014 and 2018 Village Potential Census. First, we construct the dataset into a difference-in-differences setup. The urban villages that initially did not have any green open spaces in 2014 and then had them in 2018 were assigned as the treatment group, and those without any green open spaces in both periods were the comparison group. Then, we estimated the impact of urban green spaces on the probability of flooding and open waste burning. The results indicate that the likelihood of flooding and open waste burning had decreased in treated areas by 2018.

This study aims to determine the effect of knowledge management (KM) where the variables consist of people, processes and technology on employee performance at Pupuk Sriwidjaja Inc. The object of this research is associated with the development of the world of fertiliser industry, while the scope of research aimed at Pupuk Sriwidjaja Inc as one of the largest fertiliser companies in Indonesia. The type of research is descriptive with explanatory research. Sampling is conducted by proportional stratified random sampling method. Data analysis uses multiple linear regression analysis. The results show KM where the variables consist of people, process, and technology simultaneously influence on the employee performance.

The Baribis Fault is an important active fault in West Java, Indonesia. This fault has recently attracted the attention of many parties since some fault segments pass through densely populated areas, raising the risk of shallow earthquakes. The long-offset resistivity tomography method was applied to image the active Baribis Faults. This method clearly showed the subsurface geometry, including the contact characteristics of the Baribis Fault near the subsurface. The long-offset resistivity tomography surveys were acquired using multi-electrodes and multi-nodes, and the data acquisition was wirelessly controlled via a WiFi connection. The pole–dipole resistivity tomography image shows a 35^∘ dip overhang structure of the Baribis thrust fault near the Jatigede area in Middle Eastern West Java, with a strike fault segment in a relative East–West direction. However, the other long-offset tomography images in northeastern West Java, near the Conggeang–Sumedang area, show the oblique thrust fault phenomena of the Baribis Fault with a strike in the Northeast–Southwest direction. The stress caused by the Cimandiri–Lembang regional strike–slip fault likely influences the dynamics of the Baribis Fault in the close area of Sumedang.

This paper studies the COVID-19 pandemic’s impact on Indonesia’s labor market, using the exogenous timing of the pandemic in a seasonal difference-in-differences framework. We use multiple rounds of Indonesia’s National Labor Force Survey to establish a pre-pandemic employment trend and attribute any difference from this trend to the estimated effect of the pandemic on employment outcomes. We find mixed impacts of the pandemic on Indonesia’s labor market. While the pandemic has reduced the gender gap in employment participation due to the “added worker effect” among women, it has also lowered overall employment quality among both women and men. The increase in female employment was mainly driven by women in rural areas without a high school education entering either informal agricultural employment or unpaid family work. For men, the pandemic had negative employment impacts for all subgroups. Among the employed, both women and men work fewer hours and earn lower wages.

The role of social capital in economic development has been a subject of interest to both academics and practitioners of development for several decades. However, empirical evidence on social capital in the context of developing countries is still relatively scant. This study explores the effects of social capital on economic development in Indonesia, a large and multi-ethnic developing country. Using district-level data for 2006–2019, we find that the relationships between social capital and economic development are complex. There are both favorable and unfavorable effects of social capital on economic development, as well as nonlinear effects. Hence, we cannot draw unequivocal conclusions on the benefits or disadvantages of social capital for economic development. Nevertheless, this study finds that trust among people across different ethnic groups, participation in communal works and social activities, and trust in government are the most important forms of social capital needed to improve people’s welfare.

Lead poisoning is one of the environmental problems affecting human health. In Indonesia, leaded gasoline was completely phased out since July 2006. As part of an air pollution study, Pb monitoring was carried out from 2005 to 2012 in Bandung to assess the impact of the use of unleaded gasoline on the Pb level in the ambient air in Indonesia. Airborne particulate samples were collected using a Gent stacked filter unit sampler in two size fractions of $<2.5\mu \text{m}$ (fine) and 2.5 to $10\mu \text{m}$ (coarse). Black carbon (BC) was determined by reflectance and elemental analysis was performed using particle induced X-ray emission (PIXE). The results showed that the annual averages of lead concentrations in the fine particulate matter in 2005, 2006, 2007, 2008, 2009, 2010, 2011 and 2012 were 44.53, 27.06, 22.21, 17.75, 17.21, 16.24, 19.25 and 12.69 $\text{ng}\cdot {\text{m}}^{-3}$, respectively. The airborne lead concentrations showed a declining trend over the years after implementation of the government policy of phasing out leaded gasoline. After six years of monitoring, the lead concentration in PM2.5 was decreased by over 70% compared to samples collected before July 2006. The average of PM mass, BC and elemental concentrations are also presented and discussed. The significant decrease of Pb concentration in the ambient air of Bandung is a great success story of the phase out of leaded gasoline in Indonesia.

Indonesia, Southeast Asia's most populous state and its largest economy, was deeply affected by the economic crisis of 1997–1998. Its economic contraction in 1998, of over 13%, was the sharpest among all four crisis-affected East Asian economies. This followed three decades of virtually uninterrupted, rapid economic growth. The country's economic crisis was accompanied by regime collapse, resulting in the departure of then President Suharto after 32 years of authoritarian rule. This paper examines the country's socioeconomic development in the decade since the crisis, in the context of the earlier growth, and the very different institutions of economic governance operating under the new democratic regime of weakened central authority and many more economic policy actors. The main conclusions are that growth and macroeconomic stability have been restored surprisingly quickly, but that microeconomic policy and the investment climate are less predictable.

This paper evaluates the benefits of the health card subsidy, issued by the Indonesian government after the financial crisis in 1997, on elderly health care demand. The health card subsidy provides free access to health services, and was accepted at any available health center or puskesmas. Using the Indonesia Socioeconomic survey data (Susenas) for 2003, results show that health cards issued to the poor consistently increase the demand for health care facilities among the old population. Unfortunately, it is also found that the health card benefited wealthier individuals in their access to health centers or puskesmas.

This paper adopts the Johansen approach to cointegration to estimate a narrow money-demand function for Indonesia with annual data for the period 1970–2007. Empirical results suggest that there exists a cointegral relationship between real narrow balances, real permanent income and the deposit rate of interest. The recursive and rolling regression results suggest that the narrow money-demand function has remained largely stable irrespective of ongoing financial reforms in Indonesia since the late 1980s and/or financial crises in the late 1990s. The Quandt-Andrews breakpoint and the Hansen-Johansen stability tests results however suggest that the narrow money-demand relationship had a structural break in the early 1990s. This corresponds to a period of time when the banking and financial reforms in Indonesia took effect. The Chow breakpoint test results suggest that there was also a structural break in the money-demand relationship during the financial crises of the late 1990s.

Most of the studies on the poverty impact of economic shocks as well as policy reforms assumed the poverty line as a fixed line; thus, the poverty outcome of shocks may underestimate (overestimate) and mislead in policy guidance. This research aims at empirically investigating the difference of poverty outcome between applying a fixed and an endogenous poverty line. Applying computable general equilibrium microsimulation (CGE-MS), this study has empirically proven that, if a fixed poverty line is applied, the poverty impact of economic shocks which significantly increase (decrease) price will always be underestimated (overestimated). This study empirically found that there is a 0.316 percentage point difference in the poverty outcome between applying the endogenous poverty line and the fixed poverty line when analyzing the impact on poverty in Indonesia of a doubling in the imported soybean price. Supposing the fixed poverty line, the poverty rate will increase by 0.167 percentage points, while supposing the endogenous poverty line, the poverty rate will increase by 0.483 percentage points. Therefore, applying either an endogenous or a fixed poverty line will have a different policy implication. This study strongly suggested that the endogenous poverty line should be applied when analyzing the poverty impact of shocks due to the precision in outcomes.

Using the Indonesian Family Life Survey, this paper elucidates the factors related to happiness in Indonesia. Some factors yield results consistent with those in the literature, but other factors such as unemployment and the female gender turn out not to be robust. Some attempts are made to purge endogeneity for past income mobility, social trust, and political environment. Also, measures with a more immediate impact on happiness are exploited for social trust and political environment. The sign of the coefficient on past income mobility is reversed once the variable has been purged of endogeneity. In addition, social trust and political environment are found to have little relationship with happiness.

Decentralization is in vogue. However, the relationship between decentralization and local-level development dynamics remains unclear. Does decentralization lead to a ‘reform dividend’ of more rapid development in better-governed regions, with attendant national benefits? What is the impact on spatial inequality? In particular, do poorer regions lag further behind as equalizing fiscal policies at the national level weaken? We address these issues with reference to Indonesia, the world’s largest archipelagic nation, which implemented a ‘big bang’ decentralization program in 2001. Our main conclusion, perhaps counterintuitive, is that decentralization had a minimal impact on regional development dynamics, although its political impacts have been far-reaching.

Trust was found to promote entrepreneurship in the US. We investigated whether this was true in a developing country, Indonesia. We failed to replicate this; this failure was true whether trust was estimated at the individual or community level or whether ordinary least squares (OLS) or two stage least squares (2SLS) was employed. We reconciled the difference between our results and those for the US by arguing that the weak enforcement of property rights in developing countries and the consequent hold-up problem make it more efficient for entrepreneurs to produce generic goods than relationship-specific goods—producing generic goods does not depend on trust.

We use a monthly dataset to analyze whether Islamic banks have greater market power compared with their conventional counterparts. Using a sample of Indonesian banks, we find that Islamic banks possess greater market power than conventional banks. This condition does not hold, however, when we compare state-owned Islamic and conventional banks. We also find some specific determinants of Islamic banks’ market power: the Ramadan holy month (positive impact), the proportion of profit-and-loss sharing in their financing (negative impact), and the presence of a Sharia board (positive impact). Interestingly, Ramadan benefits not only Islamic banks but also conventional banks. Our findings support prior literature emphasizing the role of religiosity in Islamic banks’ behavior.

We present evidence against the well-established education–health gradient by relating education to measured hypertension status in 5,873 men and 6,152 women aged 40$+$ in Indonesia. Once a basic set of covariates was controlled for, the two variables were not statistically significantly related. We argue that this lack was due to neglect of chronic diseases. It appears that the assumption of full information in theories on the education–health gradient is too strong to be applied to the developing world. Therefore, more information needs to be provided to the public regarding the seriousness of chronic diseases and preventive and curative methods.

In recent years, China has been catching-up with other advanced economies and become one of the “leading geese” in the Asian economy. China not only plays a leading role in regional production network but also in various regional economic cooperation. Indonesia, being one of the following geese, needs to adjust its position to benefit from this change in global and regional order. While other more advanced economies have less to offer, Indonesia has gradually moved closer toward China in terms of economic cooperation. Using the flying geese model, this paper argues that China’s BRI might change trade and investment trends in Indonesia. China BRI might complement the role of Japan as a catalyst for economic development in the Asian region in general and in Indonesia in particular. There is no official BRI project agreed by Indonesia so far. However, there are a number completed and ongoing China–Indonesia projects, which arguably might pave the way for future BRI investment. Currently, apart from the Jakarta–Bandung High speed railways, most of the projects are concentrated in resource-exploitation needed by China and the fulfilment of Indonesian development needs, such as power generation, mineral smelters and industrial parks. From the Beijing’s perspective, these projects are perceived as part of BRI. Since these so-called BRI projects have not been completed, it is therefore impossible to assess their impacts on Indonesia’s industrialization at this point. However, we can still argue that BRI might have initiated a new type of investment that might in turn change the industrial trends, structure and performance in Indonesia. If this change leads to improvement in products quality or value added, industrial upgrading, technological transfer and export boost, then one may argue that BRI has brought promised benefits to the host economy (i.e., Indonesia). Otherwise, the benefits would be negligible.

This study investigates the patterns and trends in the returns to skill in the Indonesian labor market over the period 2007 to 2013, a period of rising earnings and income inequality. The study takes into account the labor demand and supply across regional development regions and over time. It presents evidence on the returns to skill related to structural changes in the economy through the growth of modern services and the resource boom. It confirms that skill premiums varied across regional development areas. The composition of industries across regions, female labor participation, the proportion of casual workers, the supply of tertiary-educated workers and factors unique to each region are all determinants of the regional skill premiums. The results support the policy focus on developing human capital in Indonesia to meet the rising demand for skilled workers and show the role of the manufacturing sector and minimum wages policy in reducing the skill premium.

Changes in the oil price directly affect production costs, and subsequently, the general price level of products. With Indonesia observing an inflation targeting policy, this study applies the nonlinear autoregressive distributed lag (NARDL) technique to investigate the effect of oil price fluctuations in Indonesia. The relationship is important for the central bank to gauge the effectiveness of the inflation targeting policy in immunizing the country from oil price fluctuations. Our findings have revealed that there was an asymmetric behavior between oil price and the inflation rate (producer price index), thus questioning the effectiveness of the inflation targeting policy. More specifically, in the long run, an increase in the oil price will tend to lead to an increase in the rate of inflation with a greater deviation, while an oil price reduction will lead to a decrease in the inflation rate with a lower deviation. This suggests that the benefits of an oil price reduction are not passed down to the consumer.

This paper investigates the effect of exchange rate volatility on bilateral trade between Taiwan and Indonesia via 19 export and import industries. Considering the existence of an asymmetric effect of exchange rate volatility on trade, we employ an asymmetric ARDL model and arrive at the following main results. First, the long-run asymmetric effect of exchange rate volatility shows far higher impacts on Taiwan’s exports to Indonesia than on Taiwan’s imports from Indonesia. Second, the short-run asymmetric effect of exchange rate volatility causes unstable changes on the trade amounts for most of Taiwan’s export and import industries with Indonesia.

Informal employment is a critical source of income for both internal migrants and non-migrants. This study uses the Rural–Urban Migration in Indonesia (RUMiI) project data for 2008 and 2009 to investigate the role of informal employment in earnings among internal migrants and non-migrants in Indonesia while considering the broader nature of informal employment and remuneration. Results show that when using a detailed measure of informality, income consequences of more intensive informal employment are severe, which had not been recognised in the literature. Some of the largest earnings reductions resulting from moving to more informal employment were experienced by non-migrants.