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Structural Change and Regional Economic Growth in Indonesia

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  • Andriansyah
  • Asep Nurwanda
  • Bakhtiar Rifai

Abstract

This paper investigates the relationship between structural change and regional economic growth in Indonesia. We utilise the shift-share method for 30 provinces over the period 2005–18 as a measure of structural change. We demonstrate that structural change has occurred across provinces, even though it is slowing towards an agricultural–services transition. By employing panel data models, this study shows that structural change is a significant determinant of growth. Structural change matters for growth if there is an increase in productivity within sectors. This study is unable to show that the movement of labour across sectors leads to higher economic growth. However, the increase in productivity within sectors has more impact on regional growth on a longer-term basis.

Suggested Citation

  • Andriansyah & Asep Nurwanda & Bakhtiar Rifai, 2023. "Structural Change and Regional Economic Growth in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 59(1), pages 91-117, January.
    • Handle: RePEc:taf:bindes:v:59:y:2023:i:1:p:91-117
    DOI: 10.1080/00074918.2021.1914320
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    2. Niembro, Andrés & Calá, Carla Daniela, 2023. "Cambio estructural regional en Argentina: conceptualización y medición a nivel de áreas económicas locales (1996-2019)," Nülan. Deposited Documents 4051, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.

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    More about this item

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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