Analysis of the effect of international trade openness on inequality between districts/cities in Indonesia's provinces

This study aims to determine the impact of international trade openness on regional inequality in Indonesia's provinces by using the concept of economic geography. Other factors such as geographic accessibility, labor share in the manufacturing sector, population, and government expenditure are...

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Main Authors: Rahmi Fadhillah, Zamroni Zamroni
Format: Article
Language:English
Published: Indonesian Institute for Counseling, Education and Therapy (IICET) 2023-03-01
Series:JPPI (Jurnal Penelitian Pendidikan Indonesia)
Subjects:
Online Access:https://jurnal.iicet.org/index.php/jppi/article/view/1761
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author Rahmi Fadhillah
Zamroni Zamroni
author_facet Rahmi Fadhillah
Zamroni Zamroni
author_sort Rahmi Fadhillah
collection DOAJ
description This study aims to determine the impact of international trade openness on regional inequality in Indonesia's provinces by using the concept of economic geography. Other factors such as geographic accessibility, labor share in the manufacturing sector, population, and government expenditure are also estimated. This study uses panel econometric analysis. The data used from 33 provinces in Indonesia from 2003-to 2018 was obtained from Statistic Indonesia (BPS). The result shows that international trade openness has a positive effect on increasing inequality between regions. However, openness to international trade hurts increasing inequality between regions if it is supported by geographic accessibility. The economic dispersion causes this due to cost efficiency and competitive forces. In addition, the share of labor in the manufacturing sector has no effect. However, the population and the government expenditure have a positive and significant effect on regional inequality. Positive exports tend to reduce regional inequality. Each province's exports and imports also affect this result.
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spelling doaj.art-18d4b8376ca64d7ea38bfb31ed78855b2023-08-05T04:58:12ZengIndonesian Institute for Counseling, Education and Therapy (IICET)JPPI (Jurnal Penelitian Pendidikan Indonesia)2477-85242502-81032023-03-019153053410.29210/0202317611395Analysis of the effect of international trade openness on inequality between districts/cities in Indonesia's provincesRahmi Fadhillah0Zamroni Zamroni1Universitas Negeri YogyakartaUniversitas Negeri YogyakartaThis study aims to determine the impact of international trade openness on regional inequality in Indonesia's provinces by using the concept of economic geography. Other factors such as geographic accessibility, labor share in the manufacturing sector, population, and government expenditure are also estimated. This study uses panel econometric analysis. The data used from 33 provinces in Indonesia from 2003-to 2018 was obtained from Statistic Indonesia (BPS). The result shows that international trade openness has a positive effect on increasing inequality between regions. However, openness to international trade hurts increasing inequality between regions if it is supported by geographic accessibility. The economic dispersion causes this due to cost efficiency and competitive forces. In addition, the share of labor in the manufacturing sector has no effect. However, the population and the government expenditure have a positive and significant effect on regional inequality. Positive exports tend to reduce regional inequality. Each province's exports and imports also affect this result.https://jurnal.iicet.org/index.php/jppi/article/view/1761regional inequality, the openness of international trade
spellingShingle Rahmi Fadhillah
Zamroni Zamroni
Analysis of the effect of international trade openness on inequality between districts/cities in Indonesia's provinces
JPPI (Jurnal Penelitian Pendidikan Indonesia)
regional inequality, the openness of international trade
title Analysis of the effect of international trade openness on inequality between districts/cities in Indonesia's provinces
title_full Analysis of the effect of international trade openness on inequality between districts/cities in Indonesia's provinces
title_fullStr Analysis of the effect of international trade openness on inequality between districts/cities in Indonesia's provinces
title_full_unstemmed Analysis of the effect of international trade openness on inequality between districts/cities in Indonesia's provinces
title_short Analysis of the effect of international trade openness on inequality between districts/cities in Indonesia's provinces
title_sort analysis of the effect of international trade openness on inequality between districts cities in indonesia s provinces
topic regional inequality, the openness of international trade
url https://jurnal.iicet.org/index.php/jppi/article/view/1761
work_keys_str_mv AT rahmifadhillah analysisoftheeffectofinternationaltradeopennessoninequalitybetweendistrictscitiesinindonesiasprovinces
AT zamronizamroni analysisoftheeffectofinternationaltradeopennessoninequalitybetweendistrictscitiesinindonesiasprovinces