In recent decades, financial crises in various countries have often been preceded by the rise in non-performing loans (NPLs) in the banks' asset portfolios. The increase in NPLs is proven to have adverse impact on the banking sector so that understanding the determinant of NPLs is immensely crucial to ensure the efficiency and soundness of the overall economy. This study aims to shed light on bank-specific factors that affect loan default problems in developing countries whose banking sectors play a major role in the overall economy. This study analyzes panel data sets of 36 commercial banks listed in the Indonesian Stock Exchange during the period 2008-2015. Applying fixedeffects panel regression model reveals that Indonesian banks' profitability and credit growth negatively influence the number of NPLs. Moreover, banks with higher profitability are proven to have lower NPLs because they can afford adequate credit management practices. Likewise, banks with higher credit growth evidently have lower NPLs in the sense that they demonstrate more specialized lending activity and thus have better credit management systems. These findings imply that, in order to lower loan defaults that can deteriorate banks' asset quality, banks should maintain their level of profitability and increase, rather than decrease, their credit supply to debtors.

Indonesia is a rapidly growing and internationally competitive economy that is well integrated into globalized production systems. The global value chain (GVC) model has proven to be a popular analytical framework to explain how global lead firms structure and organize global production through dispersed global suppliers. Indonesia's leading export sectors, garments and electronics, are well integrated into GVCs. Engagement in GVCs, often led by leading global brands, is seen as a basis for local producers to become globally competitive and to grow. It also comes with challenges-local producers must meet the demanding pressures from lead firms on prices, on-time delivery, product quality, and social, environmental and labour standards. The possibilities for local producers to learn, acquire new capabilities and upgrade to enhance their competitiveness are often conditioned by the nature of ties that they have with their global lead firms. Yet, this paper argues, the GVC model fails to recognize agency on the part of local firms in this learning process. Moreover, particular forms of governance arrangements within GVC ties can restrict the prospects for local producers to enhance capabilities and upgrade. Drawing on selected case study evidence from the Indonesian garments and electronics sectors, the paper explores the relationship between distinct types of GVC engagements and firmlevel learning and upgrading, and considers how some GVC ties may restrict upgrading.

Nowadays, standards play a central role in the governance of international business relations; palm oil is no exception. The focal issue of palm oil is sustainable processes of production and sourcing, thus multi-stakeholder initiatives such as the Roundtable on Sustainable Palm Oil (RSPO) set out the sustainability principles and standards, and manage the certification system (CSPO). Empirical evidence based on in-depth interview with various stakeholders in the Indonesian palm oil industry indicates that the development of the RSPO sustainability standards is perceived to be in favor of a particular interest group due to the asymmetrical power and unbalanced control structure of the stakeholders. Thus the powerful stakeholders are able to exercise imperative power over other stakeholders, to the extent that it actually contradicts the others' interests. This paper puts forward the notion that a more equitable governance system should be developed through the introduction of the reward system on the CSPO transaction.The reward system can demonstrate the original motivation of the RSPO toward consensus among all stakeholders to equally contribute in the implementation of sustainability Principles and Criteria (P&C) and standards.

There is a growing awareness and interest among scholars of the important role China and India can play in governing globalisation of economy. Recent literature has tended to emphasise the divergent development outcomes of producer and supplier countries engaged in value chains led by China and India. The different market preferences and legitimacy of private‐driven governance of China and India from developed economies such as the European Union and the United States bring about unsustainable development of countries supplying for China and India. Taking empirical evidence from Indonesian palm oil industry, this paper argues, on the contrary, that Indonesian palm oil producers keep commitments to progress towards sustainable production despite the rising importance of India, China, and other Global South economies as buyers and consumers along with the European Union. The Government of Indonesia also takes initiatives to facilitate the palm oil producers to reach a socially optimum sustainability over time. Buyers of China and India tend to require less restrictive sustainability standards of palm oil production than the European Union, but this is a matter of a temporal dimension of their domestic public interest and government policy priority on sustainability governance. The implication for research on sustainability governance in the Global South‐driven regional value chain is that attention should be paid to the lead of producers and their nation‐state in driving the value chains towards sustainable production and supply.

The Indonesian Sustainable Palm Oil (ISPO) is a mandatory certification for palm oil plantations based on compliance with Indonesia’s regulations. Its implementation has been slow, particularly for independent smallholders that face problems of complicated requirements, limited capacity, and limited funding. Meanwhile, limited incentives are in place, either in the form of premium prices, ease of regulation, or funding. This article aims to elaborate on the role of incentives and their options in supporting the acceleration of ISPO implementation to ensure and improve the market access of smallholders. It identifies ways to develop incentives to facilitate the acceleration of ISPO certification and alternative financing sources available to support this. The method of this research is based on qualitative methodology using a literature review, policy document analysis, and in-depth interviews with informants from the government and smallholders. The analysis of this article shows that incentives are needed in the form of funding, regulatory measures, technical assistance, promotion, and rewards for good practices to provide better facilitation and financial support for the regulatory compliance in the legal, managerial and financial aspects of the ISPO. These incentives target government and smallholders. Implications for enabling these incentives include the improvement of government coordination, improved understanding of challenges faced by smallholders, and adoption of innovative approaches to manage financial resources, which are crucial to facilitate smallholders’ capacity and organizational improvement.

Entrepreneurship is claimed to have a positive and significant effect on economic growth in developed countries, but less so in developing countries. Using the growth model, this study examines the impact of entrepreneurship on economic performance in Indonesia as indicated by economic growth and income per-capita from 1985 to 2017. The estimation result confirms the non-significant effect of the growth of entrepreneurial ventures on the growth of GDP per-capita. However, the accumulation of the ventures has a positive and significant effect on the level of GDP per capita. The different typology of entrepreneurial ventures in Indonesia provides some insight to explain the finding, namely: scale does matter. Indonesia already has abundant micro-scale entrepreneurs, but it has only a limited amount of small-scale entrepreneurs, and even fewer medium or large-scale entrepreneurs. This finding contributes to a better understanding of the statistically non-significant impact of entrepreneurship on economic growth in developing countries. This study also suggests that entrepreneurship policy in Indonesia should focus more on facilitating micro-scale ventures to continuously develop toward small, medium, and ultimately large-scale enterprises rather than on creating start-ups.

Nowadays, Global Value Chain (GVC) theoretical framework has become a tool can be utilized by country and company to understanding its competitive advantage and position in global economy. By governing companies from various country around the globe into global network relationships, GVC has shown a great value added to the product. The competition among lead firms are built through their ability to gain the most efficient production by sourcing globally, in which involve local company, and Multi National Enterprise's (MNE's) located at developing country. Indonesia is a case of country in which many global lead firms include local company in its value chains. This study aim to understand the value chain governance of Indonesian local company within footwear's industry organized by a global brand and its contribution to development of the local company. This paper revealed that the involvement of local company within Indonesian footwear industry is driven by global lead firm. The first tier suppliers are mostly from Taiwan and only one

In decentralization system, understanding the characteristics of region’s economy becomes necessary for productivity. In that regard, this descriptive study aims to describe the characteristics of the local economy in Balinese regencies and to identify the potential sectors to be developed therein. Using such methodologies as Klassen Typology, Location Quotient, Growth-Ratio Model, and Overlay analysis from year 2010 to 2016. As a result, we have found significant gap amongst regencies, where Badung and Denpasar are the most developed regencies, with high level both in growth rate and GDP per Capita. On the other hand, Klungkung, Jembrana, Bangli, Karangasem, and Tabanan are the least developed. Furthermore, it was found that most sectors in Bali are experiencing slow growth during the research period. By studying all the regencies in Bali province, this study not only enrich the existing literature but also recommend potential sectors from each region to be developed in order to reduce the development gap between regencies.