Journal of Economics Research and Social Sciences

How Regional Economic Growth, Population, and Manufacturing Value-Added Contribute to Regional Labor Force Participation

Muhammad Farid Alfarisy — Mon, 11 Aug 2025 00:00:00 +0700

This study investigates the relationship between manufacturing value-added, GRDP (Gross Regional Domestic Product), and population growth on the labor participation rate in the region. The sample comprises 16 provinces in total. It consists of 10 provinces that experienced economic growth rates lower than the national growth rate between 2017 and 2019. The remaining six provinces have economic growth that exceeded the average national economic growth from 2017 to 2019. These 6 provinces are located on Java Island, and the other 10 provinces are located outside Java Island. Thus, we also added the province location variable to our analysis. We employed panel data regression to estimate the data. This study finds that the region’s economic and population growth substantially impacts the region’s labor participation rate. While the manufacturing value-added, the labor productivity rate, and the location do not significantly affect the labor participation rate of the region. Since economic and population growth are significant factors influencing labor force participation, some government policies should prioritize promoting sustainable economic development and attracting people to the province. The result of the study on the effect of manufacturing value-added and labor productivity shows that it has no impact on labor participation rates. This suggests that policies aimed solely at boosting manufacturing output or labor productivity may not automatically translate into higher labor force participation. Policymakers should, therefore, diversify their focus to other sectors, such as services or technology, that might better encourage workforce engagement.

The Influence of Macroeconomic Indicators on Foreign Exchange Reserves in Indonesia

Lestari Sukarniati, Widara Widara, Gea Dwi Asmara — Mon, 11 Aug 2025 00:00:00 +0700

This study aims to analyze the influence of macroeconomic indicators such as exports, imports, inflation, exchange rates, and the Bank Indonesia (BI) rate on foreign exchange reserves in Indonesia during the 2010-2023 period. The research methodology employed is multiple linear regression analysis and the Error Correction Model (ECM) with monthly time series data. The results indicate that exports, inflation, and exchange rates significantly affect Indonesia's foreign exchange reserves in the long run. Exports and exchange rates have a positive effect, while inflation also positively affects foreign exchange reserves. Conversely, the benchmark interest rate (BI Rate) has a significant adverse impact. In the short term, only inflation and exchange rate have a significant effect, negatively impacting foreign exchange reserves. This research contributes original value to the literature by integrating a broad set of macroeconomic indicators into a single, comprehensive model. This approach is seldom found in previous studies. Whereas earlier research typically assessed these variables in isolation or limited combinations, this study concurrently examines their collective impact within a consistent ECM framework over a 14-year monthly dataset. As such, this study enhances the current understanding of the short- and long-term macroeconomic dynamics affecting foreign exchange reserves and provides valuable insights for policymakers in formulating external sector strategies.

Effectiveness of Macroprudential Policy on Banking Credit Growth in Indonesia (2015-2023)

Marita Asri Cendani, Inda Fresti Puspitasari — Tue, 12 Aug 2025 00:00:00 +0700

The COVID-19 pandemic shows that macroprudential policy is one of the crucial instruments in mitigating economic shocks and ensuring the financial system. This study examines the effectiveness of macroprudential policies on banking credit growth in Indonesia from 2015 to 2023 by analyzing the impact of the Debt-to-Income Ratio (DTI), Minimum Reserve Requirement (GWM), Capital Adequacy Ratio (CAR), and Non-Performing Loans (NPL). This study aims to give regulators insights into optimizing policy combinations to mitigate financial risks while supporting sustainable economic growth. The results of panel data regression revealed that DTI and CAR significantly impact banking credit growth. In contrast, GWM and NPL didn’t have a significant effect. These findings emphasize the critical role of macroprudential policies in maintaining a balance between credit growth and financial stability, especially in times of economic uncertainty. This study contributes to policymakers and financial regulators optimizing macroprudential frameworks to enhance financial resilience and support sustainable credit distribution in Indonesia’s banking sector.

Analysis of Banking Stock Performance Before, During, and After the COVID-19 Pandemic on the Indonesia Stock Exchange (IDX)

Fri, 22 Aug 2025 00:00:00 +0700

This study analyzes the performance differences of Indonesia’s banking sector stocks, represented by the Infobank15 index, before, during, and after the COVID-19 pandemic. Using ANOVA and Post Hoc Testing, the study finds no significant differences in stock returns across these three periods despite the substantial economic disruption caused by the pandemic. Like other industries, the banking sector faced a downturn at the start of the pandemic but managed to recover. This finding underscores that the banking sector maintained stability across different periods due to the strong financial fundamentals, including consistent Non-Performing Loan (NPL) and Return on Assets (ROA) ratios throughout the pandemic. The government’s support, such as credit restructuring policies and digitalization of banking services, facilitated the sector’s adaptation to economic challenges, allowing for continued operations despite social restrictions. The study highlights that the banking sector’s ability to expand its digital services mitigated the crisis's immediate impacts and positioned it as an attractive option for investors seeking stability. This study offers insights for policymakers and adds to the literature on the banking sector’s resilience during global crises.

Determinants of Crime Rate: The Case from Regions of Mindanao, Philippines

Fri, 22 Aug 2025 00:00:00 +0700

This study examines the factors influencing crime rates across various regions in Mindanao, Philippines, from 2009 to 2022, addressing its economic and security challenges. Like many developing countries in Asia, the Philippines faces disparities in economic growth, with Mindanao lagging behind other areas in terms of development. This issue is further intensified by travel advisories from foreign governments, such as the United States, United Kingdom, Canada, and Australia, impacting tourism and foreign investment. By analyzing GRDP per capita, mean years of education, unemployment rate, urban population, police operating expenses, and police visibility, the research uses panel regression analysis to determine significant crime predictors. Results show that mean years of education have a considerable positive relationship with crime rates, suggesting that higher education levels may be linked to increased crime, particularly through the involvement of educated individuals in sophisticated crimes, such as white-collar crime or drug-related activities. Meanwhile, police visibility has a significant negative relationship with crime rates, indicating that a higher police presence is an effective deterrent, as criminals are reluctant to engage in criminal activities when a strong police presence is evident. Other variables, such as GRDP per capita, unemployment rate, urban population, and police operating expenses, were insignificant. These findings underscore the complexity of crime factors and the necessity for strategic police allocation and education reforms, providing insights for policymakers in addressing crime. The study’s implications extend beyond the Philippines, offering insights for other countries facing similar challenges in balancing economic growth and crime prevention.

Foreign Investment, Human Development, and Regional Disparities in Indonesia: A Provincial Comparative Analysis

Sun, 31 Aug 2025 00:00:00 +0700

This study investigates the complex bidirectional relationship between Foreign Direct Investment (FDI) and the Human Development Index (HDI) in Indonesian provinces, with Gross Regional Domestic Product (GRDP), Education, and Health as mediating factors. Addressing interprovincial development inequality, this research uniquely accounts for socioeconomic heterogeneity by classifying provinces into fast, medium, and slow economic growth categories. Using panel data from 2010 to 2023 for 34 provinces, the study applies robust econometric methods, including panel unit root, cointegration, Fully Modified Ordinary Least Squares (FMOLS) for long-run estimation, and Granger causality tests. Findings reveal consistent long-run cointegration among all variables across categories. FMOLS results generally show that FDI, GRDP, Education, and Health positively and significantly influence HDI. However, notable anomalies include a negative impact of Health on HDI in fast-growing provinces and Education in slow-growing provinces. Granger causality tests demonstrate varied dynamics: bidirectional FDI-HDI relationships at the national level and in medium-growth provinces, but unidirectional causality from FDI to HDI in fast and slow-growth provinces. These results underscore the critical need for adaptive, regionally specific investment and human development policies to address persistent disparities and optimize FDI's contribution to equitable development across Indonesia.

Rediscovering Local Wisdom: A Cultural Turn in Islamic Economic Education

Ayif Fathurrahman — Sun, 31 Aug 2025 00:00:00 +0700

This study explores the urgent need for a cultural turn in Islamic economic education by emphasizing the integration of local wisdom into its theoretical and pedagogical frameworks. While contemporary Islamic economics has developed rapidly in institutional and academic domains, its educational approaches often remain disconnected from the socio-cultural contexts in which it operates, by overlooking indigenous economic values and practices rooted in local traditions—such as mutual cooperation, ethical trade, and community-based redistribution—Islamic economic education risks becoming abstract, elitist, and less impactful at the grassroots level. This paper argues that local wisdom is not merely a cultural artifact, but an epistemic resource aligned with the maqāṣid al-sharī‘ah, capable of enriching curriculum content and pedagogical methods. Through a conceptual-normative analysis, this research highlights how incorporating local wisdom can bridge epistemological gaps, foster inclusive education, and promote a more holistic understanding of Islamic economics that is both theoretically grounded and contextually relevant. The findings suggest that reclaiming local wisdom is essential for improving educational outcomes and restoring the ethical and social dimensions of Islamic economics in pluralistic and postcolonial societies like Indonesia.

Nexus between Extreme Poverty and CO2 Emissions in Indonesia: An Empirical Investigation with VECM Approach

Muhammad Rahadi Siregar, Karini Halma, Risma Alifiyanti, Fitri Kartiasih — Sun, 31 Aug 2025 00:00:00 +0700

Two sustainable development goals, poverty reduction and environmental quality, present challenges in Indonesia. While extreme poverty in Indonesia declined from 1990 to 2022, CO2 emissions rose, making Indonesia vulnerable to achieving these goals. This study investigates the conflict between extreme poverty alleviation and environmental quality improvement as measured by CO2 emissions, focusing on the relationship between the two. Using 1990-2022 time series data and the Vector Error Correction Model (VECM) approach, the results show that economic growth reduces extreme poverty but increases CO2 emissions. In addition, improving human quality (HDI) reduces CO2 emissions and extreme poverty. These findings confirm the relationship between economic growth, poverty alleviation, and environmental quality. Therefore, the government must adjust its economic development policies to be environmentally friendly and support improving human quality to overcome this challenge.

Mapping the Evolution of the Digital Economy During the COVID-19 Pandemic and in the Post-COVID-19 Period: A Bibliometric Analysis

Nita Viviani Nurhanifah, Diah Setyawati Dewanti — Sun, 31 Aug 2025 00:00:00 +0700

The rapid adoption of digital technology due to the COVID-19 pandemic has transformed the global economy and underscored the essential role of the digital economy in promoting resilience and economic growth. This study analyzes the transformation of the digital economy during the COVID-19 pandemic (2019–2022) and in the post-COVID-19 period (2023–2024), focusing on key issues such as e-commerce, digital finance, technological innovation, and their associated social and environmental impacts. Using a bibliometric approach, 31 peer-reviewed articles published between 2019 and 2024 were analyzed to identify research trends, thematic developments, and knowledge gaps. Findings indicate that during the COVID-19 pandemic, digital platforms played a vital role in maintaining economic activities amid mobility restrictions. In the post-COVID-19 period, the digital economy has emerged as a key driver of economic recovery, with financial technology (fintech) and sustainability as dominant themes. Nevertheless, persistent challenges—such as the digital divide, data privacy concerns, and uneven regulatory frameworks—hinder inclusive digital transformation. These findings have implications for digital policy formulation, emphasizing the need for equitable access, regulatory harmonization, and investment in human capital. The study suggests that policies should focus on investing in digital infrastructure, making digital tools accessible to everyone, and creating clear rules to support a more inclusive, sustainable, and resilient digital environment. These strategic efforts require ensuring the broad distribution of digitalization benefits and their contribution to long-term socio-economic development.

The Influence of Population and Gross Regional Domestic Product on Regional Original Income in Central Sulawesi

Sun, 31 Aug 2025 00:00:00 +0700

The study aims to analyze the influence of Population Number and GRDP variables, partially and simultaneously, on ROI variables in 13 Regencies/Cities in Central Sulawesi Province in 2018-2023. The data type used is secondary data with data sources from the Central Bureau of Statistics. The secondary data used is panel data from cross-sectional results of 13 districts/cities in Central Sulawesi Province and a time series from 2018 to 2023. The data analysis used is panel data regression. Based on the panel data regression analysis, the results and findings of the study showed that partially, the Population Number variable has a positive and significant effect on ROI. In contrast, the GRDP variable partially has a positive but insignificant impact on the ROI variable in districts/cities in Central Sulawesi Province in 2018-2023. The implication is that the Palu City government needs to optimize the collection of population-based regional taxes and levies, increase the efficiency of local economic management, and develop new sources of income to strengthen fiscal independence and support sustainable regional development.