Effective Industrialization Strategy Analysis in Accelerating Economic Growth in an Archipelago Area: Study in North Maluku Province
Society Volume 10 Issue 2#2022
PDF (English)



View Counter

  • Abstract viewed - 91 times
  • PDF (English) downloaded - 48 times

Search in:

| |

How to Cite

Husen, A., Runtunuwu, P., & Hasnin, M. (2022). Effective Industrialization Strategy Analysis in Accelerating Economic Growth in an Archipelago Area: Study in North Maluku Province. Society, 10(2), 223-242. https://doi.org/10.33019/society.v10i2.237


Investigating structural relations between sectors is important from a policy point of view. A clear perspective on cross-sectoral relations can be useful in formulating profitable and appropriate development strategies. This study compares Agricultural Demand Led Industrialization (ADLI) and Export-Led Industrialization (ELI) strategies. In making a comparison, the two strategies are used; multiplier matrix that describes the impact on endogenous variables due to changes in exogenous variables. Impact analysis with a simulation of the investment amount to see the impact on the formation of output, creation of gross value added, absorption of labor, income, and taxes. Cluster analysis aims to classify objects based on the characteristics of the observed object. The One Way Anova test is useful to determine whether there are differences in the investment simulation of each category, ADLI and ELI. The results of this study indicate that the sectors in the ADLI category have advantages in creating gross added value. In contrast, the sectors in the ELI category have advantages in creating output, income, taxes and employment. Furthermore, using the One-Way ANOVA test, it can be concluded that statistically, there is no average difference between ADLI and ELI in the output, labor, income, and tax variables.

DOI : https://doi.org/10.33019/society.v10i2.237
PDF (English)


Allred, B. B., & Park, W. G. (2007). The influence of patent protection on firm innovation investment in manufacturing industries. Journal of International Management, 13(2), 91-109. https://doi.org/10.1016/j.intman.2007.02.001

Altenburg, T. (2011). Industrial Policy in Developing Countries. Bonn, Germany: Deutsches Institut für Entwicklungspolitik gGmbH. Retrieved from https://www.die-gdi.de/uploads/media/DP_4.2011.pdf

Badan Pusat Statistik Provinsi Maluku Utara. (2019, July). Produk Domestik Regional Bruto Provinsi Maluku Utara Menurut Lapangan Usaha 2014-2018. Author. Retrieved from https://malut.bps.go.id/publication/2019/07/05/0072474ef61add8cef16764f/produk-domestik-regional-bruto-provinsi-maluku-utara-menurut-lapangan-usaha-2014-2018.html

Bank Indonesia. (2019, February). Kajian Ekonomi dan Keuangan Regional Provinsi Maluku Utara Februari 2019. Author. Retrieved from https://www.bi.go.id/id/publikasi/kajian-ekonomi-regional/malut/Pages/Kajian-Ekonomi-dan-Keuangan-Regional-Provinsi-Maluku-Utara-Februari-2019.aspx

Chang H. J. (2013). Industrial Policy: Can Africa Do It?. In J. E. Stiglitz, J. L.Yifu, E. Patel (Eds.) The Industrial Policy Revolution II. International Economic Association Series (pp. 49–84). London, United Kingdom: Palgrave Macmillan,. https://doi.org/10.1057/9781137335234_5

Duru, M. (2012). New challenges for industrial policy in Nigeria. Universal Journal of Management and Social Sciences, 2(7), 12-20.

Elhiraika, A. B., & Mbate, M. M. (2014). Assessing the determinants of export diversification in Africa. Applied Econometrics and International Development, 14(1), 147-160. Retrieved from https://www.usc.gal/economet/reviews/aeid14111.pdf

Gebreeyesus, M., & Mohnen, P. (2013). Innovation performance and embeddedness in networks: evidence from the Ethiopian footwear cluster. World Development, 41, 302-316. https://doi.org/10.1016/j.worlddev.2012.05.029

Goldstein, J. S., & Pevehouse, J. C. (2008). International Relations (8th ed.). Harlow, United Kingdom: Pearson Education.

Grosen, M. N., & Coskun, B. B. (2010). A decade of SAPs, market liberalization and environment in Tanzania (1987–1998). European Journal of Economic and Political Studies, 3(2), 53-71.

Hausmann, R., & Rodrik, D. (2003). Economic development as self-discovery. Journal of development Economics, 72(2), 603-633. https://doi.org/10.1016/S0304-3878(03)00124-X

Hallegate, S., Fay, M., & Vogt-Schilb, A. (2013, October). Green Industrial Policies: When and How. (Policy Research Working Paper 6677). Washington DC, United States: The World Bank. Retrieved from https://openknowledge.worldbank.org/bitstream/handle/10986/16892/WPS6677.pdf

Hernández, I., Cely, N., González, F., Muñoz, E., & Prieto, I. (2010, June). The Discovery of New Export Products in Ecuador (IDB WORKING PAPER SERIES No. IDB-WP-165). Washington DC, United States: Inter-American Development Bank. Retrieved from https://publications.iadb.org/en/publication/discovery-new-export-products-ecuador

Hosono, A. (2015). Industrial Strategy and Economic Transformation: Lessons from Five Outstanding Cases. In A. Noman & J. Stiglitz (Eds.), Industrial Policy and Economic Transformation in Africa (pp. 53–101). Amsterdam, Netherlands: Amsterdam University Press. https://doi.org/10.7312/columbia/9780231175180.001.0001

Jarreau, J., & Poncet, S. (2012). Export sophistication and economic growth: Evidence from China. Journal of development Economics, 97(2), 281-292. https://doi.org/10.1016/j.jdeveco.2011.04.001

Lin, J., & Chang, H. J. (2009). Should Industrial Policy in developing countries conform to comparative advantage or defy it? A debate between Justin Lin and Ha‐Joon Chang. Development policy review, 27(5), 483-502. https://doi.org/10.1111/j.1467-7679.2009.00456.x

Lin, J. Y. (2010, February). New Structural Economics: A Framework for Rethinking Development (Policy Research Working Paper 5197). Washington DC, United States: The World Bank. Retrieved from https://openknowledge.worldbank.org/bitstream/handle/10986/19919/WPS5197.pdf

Lin, J. Y., & Monga, C. (2010, May). Growth Identification and Facilitation: The Role of the State in the Dynamics of Structural Change (Policy Research Working Paper 5313). Washington DC, United States: The World Bank. Retrieved from https://openknowledge.worldbank.org/bitstream/handle/10986/3798/WPS5313.pdf

Loewe, M. (2013). Industrial Policy in Egypt 2004-2011. Bonn, Germany: Deutsches Institut für Entwicklungspolitik gGmbH. Retrieved from http://edoc.vifapol.de/opus/volltexte/2014/5041/pdf/DP_13.2013.pdf

McCormick, D. (1999). African enterprise clusters and industrialization: theory and reality. World development, 27(9), 1531-1551. https://doi.org/10.1016/S0305-750X(99)00074-1

McMillan, M., & Rodrik, D. (2011). Globalization, Structural Change and Productivity Growth. In M. Bacchetta & M. Jansen (Eds.), Making Globalization Socially Sustainable (pp. 49–84). Geneva, Switzerland: International Labour Organization and World Trade Organization. Retrieved from http://ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/@publ/documents/publication/wcms_144904.pdf

Mendes, A. P. F., Bertella, M. A., & Teixeira, R. F. (2014). Industrialization in Sub-Saharan Africa and import substitution policy. Brazilian Journal of Political Economy, 34(1), 120-138. https://doi.org/10.1590/S0101-31572014000100008

Mkandawire, T. (2015). Neopatrimonialism and the Political Economy of Economic Performance in Africa: Critical Reflections. World Politics, 67(3), 563-612. https://doi.org/10.1017/S004388711500009X

Mohamed, I. A., Hassan, M. M. A., Salih, A. A., & Gumaa, Y. T. (2011). Impacts of Sudan macroeconomic policy on agriculture. International Trade Journal, 3(134), 22-32. Retrieved from https://ssrn.com/abstract=1879858

Muchie, M. (2000). Leather processing in Ethiopia and Kenya: lessons from India. Technology in Society, 22(4), 537-555. https://doi.org/10.1016/S0160-791X(00)00027-0

Murphy, J. T. (2007). The challenge of upgrading in African industries: Socio-spatial factors and the urban environment in Mwanza, Tanzania. World Development, 35(10), 1754-1778. https://doi.org/10.1016/j.worlddev.2007.06.003

Okezone.com. (2011, September 12). Menkeu : FTA Merugikan Indonesia. Retrieved from https://economy.okezone.com/read/2011/09/12/320/501484/menkeu-fta-merugikan-indonesia

Pack, H., & Saggi, K. (2006). Is there a case for industrial policy? A critical survey. The World Bank Research Observer, 21(2), 267-297. https://doi.org/10.1093/wbro/lkl001

Rijkers, B., Söderbom, M., & Loening, J. L. (2010). A rural–urban comparison of manufacturing enterprise performance in Ethiopia. World Development, 38(9), 1278-1296. https://doi.org/10.1016/j.worlddev.2010.02.010

Rodrik, D. (2009). Industrial policy: don’t ask why, ask how. Middle East development journal, 1(1), 1-29. https://doi.org/10.1142/S1793812009000024

Rodrik, D. (2013, September). Structural Change, Fundamentals, and Growth: An Overview. New Jersey, United States: Institute for Advanced Study. Retrieved from https://drodrik.scholar.harvard.edu/files/dani-rodrik/files/structural-change-fundamentals-and-growth-an-overview_revised.pdf

Sitepu, R. (2013, January). Subsidi Energi dan BBM, Pengaruhnya Terhadap Industri (Policy Paper No. 13). Jakarta, Indonesia: Kadin Indonesia.

Stiglitz, J., Lin, J., Monga, C., & Patel, E. (2013, September). Industrial Policy in the African Context (Policy Research Working Paper 6633). Washington DC, United States: The World Bank. Retrieved from https://openknowledge.worldbank.org/bitstream/handle/10986/16850/WPS6633.pdf

Tsai, W. T., & Chou, Y. H. (2004). Government policies for encouraging industrial waste reuse and pollution prevention in Taiwan. Journal of Cleaner Production, 12(7), 725-736. https://doi.org/10.1016/S0959-6526(03)00053-2

Ünal, E. (2016). A comparative analysis of export growth in Turkey and China through macroeconomic and institutional factors. Evolutionary and Institutional Economics Review, 13(1), 57–91. https://doi.org/10.1007/s40844-016-0036-3

UNCTAD & UNIDO. (2011). Economic Development in Africa Report 2011. Geneva, Switzerland: United Nations. Retrieved from https://unctad.org/system/files/official-document/aldcafrica2011_en.pdf

UNECA & AUC. (2013). Making the most of Africa’s commodities: industrializing for growth, jobs and economic transformation. United Nations Economic Commission for Africa and African Union Commission. Retrieved from https://repository.uneca.org/bitstream/handle/10855/23386/b11489364.pdf

UNECA & AUC. (2014). Dynamic Industrial Policy in Africa: Innovative Institutions, Effective Processes and Flexible Mechanisms. United Nations Economic Commission for Africa and African Union Commission. Retrieved from https://www.uneca.org/sites/default/files/PublicationFiles/final_era2014_march25_en.pdf

Wade, R. H. (2009). Rethinking industrial policy for low income countries. African development review, 21(2), 352-366. https://doi.org/10.1111/j.1467-8268.2009.00213.x

Yasar, M., Paul, C. J. M., & Ward, M. R. (2011). Property rights institutions and firm performance: a cross-country analysis. World Development, 39(4), 648-661. https://doi.org/10.1016/j.worlddev.2010.09.009

Copyright (c) 2022 Owned by the Author(s), published by Society

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.


Download data is not yet available.