Decentralisation to promote Regional Development in Indonesia

This paper investigates the relationship between structural change and regional economic growth in Indonesia. We utilize several measures of structural change, i.e. structural change index, norm absolute value index, shift-share method, and effective structural change index, for 30 provinces over the period 2005-2018. We show that the structural change has occurred across provinces, even though it is slowing, towards an agricultural-services transition. By employing dynamic panel data models, this study shows that structural change is a significant determinant of growth.

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Non-market strategies and Indonesian SMEs: casualties of decentralisation?

Sanusi

Connell

2018

APJBA

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Purpose The purpose of this paper is to examine the non-market strategies adopted by government-contracted small and medium enterprises (SMEs) in order to address the challenges they faced in the business of procurement. Although SMEs are important contributors to employment and the national economy, they demonstrated different levels of effectiveness depending on the management strategies they adopted. Design/methodology/approach Using case study methodology, data were gathered by conducting interviews with the owners/managers of Indonesian SMEs. Findings were analysed using the (ia)3 framework developed to assist the understanding of non-market environments. Findings Findings indicated that a key characteristic of the Indonesian non-market environment was the influence of the government and Indonesian society. This led to differing degrees of dissatisfaction among SME owners and managers who reported that they had to work within a number of constraints for business survival, while simultaneously learning how to “play the games” demanded by the business and regulatory environment. Research limitations/implications Limitations relate to the number of empirical cases represented and the geographical area covered. Further research is recommended in order to provide the opportunity for research generalisation. Practical implications These findings illustrate the need for transparency and integrity in the procurement process in relation to Indonesian SMEs. It is proposed that SMEs in similar sectors may benefit from forming strategic alliances/industry clusters to support future knowledge sharing and promote their collective voice. Originality/value To date, studies on non-market strategies have largely focused on developed countries and large firms. Consequently, this paper goes some way towards bridging the gap in the non-market environment in developing countries concerning SMEs and potential strategies for adoption.

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Decentralisation to promote Regional Development in Indonesia

Cited by 7 publications

References 21 publications

Nationalism and the Making of Indonesian Subjects

Nationalism and the Making of Indonesian Subjects

Structural Change and Regional Economic Growth in Indonesia

Non-market strategies and Indonesian SMEs: casualties of decentralisation?

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