Inter-Sector and Inter-Country Linkages in Indonesian Economy: World Input-Output Analysis

Muchdie Muchdie; Muhammad Handry Imansyah

doi:10.23917/jep.v20i2.9057

Inter-Sector and Inter-Country Linkages in Indonesian Economy: World Input-Output Analysis

Muchdie Muchdie^(1*), Muhammad Handry Imansyah⁽²⁾

(1) Fakultas Ekonomi dan Bisnis Universitas Muhammadiyah Prof. DR. HAMKA
(2) Fakultas Ekonomi dan Bisnis, Universitas Lambung Mangkurat, Banjarmasin
(*) Corresponding Author

Abstract

Results of analysis on inter-sector and inter-country linkages in Indonesian economy using world input-output data for the years 2000, 2005, 2010, and 2014 are provided in this paper. The model was aggregated into 30 sectors and 8 countries. Inter-sector linkages are analyzed using forward and backward effect indices, and then sectors were grouped into 4 groups. Meanwhile inter-county linkage is analyzed is spill-over and feed-back effects. The results showed that firstly, number of sectors include in Group-1, namely key sectors with strong forward and backward linkages: two sectors in year 2000, one sector in year 2005, 8 sectors in year 2010 and 2014. Secondly, spill-over effects were significantly importance in Indonesia economy, as around 20 per cent of multipliers occurred in other countries: 19.74 per cent in year 2000; 20.25per cent in year 2005; 18.19 per cent in year 2010 and20.64 per cent in year 2014. Only small feed-back effects are in Indonesian economy; in average 0.12 per cent in year 2000; 0.14 per cent in year 2005; 0.15 per cent in year 2010 and 0.15 per cent in year 2014. Finally, ignoring inter-country feed-back could be misleading as error created was significant.

Keywords

inter-sector linkages, forward linkages, back-linkages, inter-country linkages, spill-over effect, feed-back effects, world input-output tables, Indonesian economy

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DOI: 10.23917/jep.v20i2.9057