Email this article 1.jpg){kind=logo}
Increasing informal sector business, does the impact of regulatory barriers? evidence from the enterprises survey
Abstract
This study uses survey data from the 2015 World Bank Enterprises Survey of firms operating in 9 provinces in Indonesia. Barriers to doing business in Indonesia for companies are calculated and ranked, and then qualitative methods are used to complete the discussion. This study aims to provide an overview and basis for these constraints so that the central and regional governments can collaborate in making policies that can support the progress of the business world through identification and mapping out barriers to doing business in Indonesia. The aid results show that the main obstacles to doing business in Indonesia in 2015 were the practices of competitors from the informal sector, political instability, and tax rates. The results of this study indicate that since starting a business in Indonesia, firms have been faced with difficulties in obtaining permits that are not in accordance with applicable regulations. For instance, data processing results show that of the firms that apply for business licenses in Indonesia, only 51.41% obtain operating license issuance services following regulations.
Keywords
Full Text:
PDFReferences
Agboli, M., & Ukaegbu, C. C. (2006). Business environment and entrepreneurial activity in Nigeria: Implications for industrial development. Journal of Modern African Studies, 44(1), 1–30. https://doi.org/10.1017/S0022278X05001394
Alatas, Vivi. Newhouse, D. (2011). Laporan Ketenagakerjaan di Indonesia Menuju terciptanya pekerjaan yang lebih baik dan jaminan perlindungan bagi para pekerja.
Amos, S., & Zanhouo, D. A. K. (2019). Financial constraints, firm productivity, and cross-country income differences: Evidence from sub-Sahara Africa. Borsa Istanbul Review, 19(4), 357–371. https://doi.org/10.1016/j.bir.2019.07.004
Antonopoulos, G. A., & Mitra, J. (2009). The Hidden Enterprise of Bootlegging Cigarettes Out of Greece: Two Schemes of Illegal Entrepreneurship. Journal of Small Business and Entrepreneurship, 22(1), 1–8. https://doi.org/10.1080/08276331.2009.10593438
Beck, T., Demirgüç-Kunt, A., & Maksimovic, V. (2005). Financial and legal constraints to growth: Does firm size matter? Journal of Finance, 60(1), 137–177. https://doi.org/10.1111/j.1540-6261.2005.00727.x
BPS. (2021). Proporsi Tenaga Kerja Pada Sektor Industri Manufaktur. In Central Bureau of Statistics. https://bps.go.id
Brixiová, Z., Kangoye, T., & Yogo, T. U. (2020). Access to finance among small and medium-sized enterprises and job creation in Africa. Structural Change and Economic Dynamics, 55, 177–189. https://doi.org/10.1016/j.strueco.2020.08.008
Buehn, A., & Schneider, F. (2012). Shadow economies around the world: Novel insights, accepted knowledge, and new estimates. International Tax and Public Finance, 19(1), 139–171. https://doi.org/10.1007/s10797-011-9187-7
Burger, N., Chazali, C., Gaduh, A., Rothenberg, A. D., Tjandraningsih, I., & Weilant, S. (2015). REFORMING POLICIES FOR SMALL AND MEDIUM-SIZED ENTERPRISES IN INDONESIA.
Charaia, V., Chochia, A., & Lashkhi, M. (2020). The impact of fdi on Economic development: The case of Georgia. TalTech Journal of European Studies, 10(2), 96–116. https://doi.org/10.1515/bjes-2020-0017
Elbahnasawy, N. G., Ellis, M. A., & Adom, A. D. (2016). Political Instability and the Informal Economy. World Development, 85, 31–42. https://doi.org/10.1016/j.worlddev.2016.04.009
EODB World Bank. (2020). Ease Of Doing Business 2020. In World Bank. World Bank Publications. https://doi.org/10.1596/978-1-4648-1440-2
Evsey D. Domar. (1946). Rate of Growth, and Employment. Journal of the Econometric Society, 14(2), 137–147.
Fowowe, B. (2017). Access to finance and firm performance: Evidence from African countries. Review of Development Finance, 7(1), 6–17. https://doi.org/10.1016/j.rdf.2017.01.006
Fries, S., Lysenko, T., & Polanec, S. (2003). The 2002 Business Environment and Enterprise Performance Survey: Results from a survey of 6,100 firms. European Bank Working Paper, Working Paper(January), 1–47.
Gaviria, A. (2002). Assessing the effects of corruption and crime on firm performance: Evidence from Latin America. Emerging Markets Review, 3(3), 245–268. https://doi.org/10.1016/S1566-0141(02)00024-9
Gulzar, A., Junaid, N., & Haider, A. (2010). What is hidden, in the hidden economy of Pakistan? Size, causes, issues, and implications. Pakistan Development Review, 49(4), 665–704. https://doi.org/10.30541/v49i4iipp.665-704
Industry, M. of. (2019). Industry Development Analysis 1st Edition. Ministry of Industry of the Republic of Indonesia.
Kounouwewa, J., & Chao, D. (2011). Financing Constraints Determinants in African Countries. The International Journal of Applied Economics and Finance, 5(1), 30–45. https://doi.org/10.3923/ijaef.2011.30.45
La Porta & Shleifer, A. (2008). The Unofficial Economy and Economic Development. National Bureau of Economic Research Working Paper 14520, December.
Loayza, N. V., & Rigolini, J. (2011). Informal Employment: Safety Net or Growth Engine? World Development, 39(9), 1503–1515. https://doi.org/10.1016/j.worlddev.2011.02.003
Mertzanis, C. (2019). Financialization, institutions, and financing constraints in developing countries. Cambridge Journal of Economics, 43(4), 825–866. https://doi.org/10.1093/cje/bez015
Regulation of the Minister of Trade of the Republic of Indonesia number 37 of 2007, (2007).
Muent, H., Pissarides, F., & Sanfey, P. (2001). Taxes, competition, and finance for Albanian enterprises: Evidence from a field study. Most, 11(3), 239–251. https://doi.org/10.1023/A:1013161211594
Nofranita, Willy. Karimi, S. Taifur, WD. Ridwan, E. (2021). Identifying the Biggest Obstacle in Doing Business : What’s The Trigger ? -An Evidence from an Enterprises Survey. Review Of International Geographical Education, 11(9), 32–43. https://doi.org/10.48047/rigeo.11.09.5
Rothenberg, A. D., Gaduh, A., Burger, N. E., Chazali, C., Tjandraningsih, I., Radikun, R., Sutera, C., & Weilant, S. (2016). Rethinking Indonesia’s Informal Sector. World Development, 80, 96–113. https://doi.org/10.1016/j.worlddev.2015.11.005
Sanfey, P., & Zeh, S. (2012). Making sense of competitiveness indicators in south-eastern Europe (Issue 145). European Bank wp0145.pdf
Soto, H. de. (2000). The Mystery of The Capital. Basic Book.
Thai, M. T. T., & Turkina, E. (2014). Macro-level determinants of formal entrepreneurship versus informal entrepreneurship. Journal of Business Venturing, 29(4), 490–510. https://doi.org/10.1016/j.jbusvent.2013.07.005
Ullah, B. (2020). Financial constraints, corruption, and SME growth in transition economies. Quarterly Review of Economics and Finance, 75, 120–132. https://doi.org/10.1016/j.qref.2019.05.009
Wang, Y. (2016). What are the biggest obstacles to the growth of SMEs in developing countries? – An empirical evidence from an enterprise survey. Borsa Istanbul Review, 16(3), 167–176. https://doi.org/10.1016/j.bir.2016.06.001
Williams, C. C., Martinez-Perez, A., & Kedir, A. M. (2016). Informal Entrepreneurship in Developing Economies: The Impacts of Starting Up Unregistered on Firm Performance. Entrepreneurship: Theory and Practice, 41(5), 773–799. https://doi.org/10.1111/etap.12238
World Bank. (2019). DOING BUSINESS 2019-Report.
World Economic Forum. (2018). The Global Competitiveness Report (K. Schwab (ed.)). World Bank.
DOI: https://doi.org/10.18196/jesp.v25i1.22217
Refbacks
- There are currently no refbacks.
Copyright (c) 2024 Willy Nofranita, Resti Fitratul Husna, Andres Sismen3
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Office:
Redaksi JESP UMY, Gedung E2 Lantai 2, Fakultas Ekonomi dan Bisnis, Universitas Muhammadiyah Yogyakarta
Jalan Brawijaya, Tamantirto, Kasihan, Bantul, Daerah Istimewa Yogyakarta 55183
Telp: (0274) 387656 ext.184
Fax: (0274) 387646
Email: jesp@umy.ac.id
Jurnal Ekonomi & Studi Pembangunan (JESP) is licensed under Creative Commons Attribution-ShareAlike 4.0 International.