Sector and Spatial-Specific Multipliers in Eastern Indonesia's Economy: An Inter-Island Input-Output Analysis

Muchdie

Abstract: This paper aimed to provide the results of analysis on total and flow-on effects, sector-specific, and spatial-specific multipliers in Eastern Indonesias Islands economy, mainly for planning and evaluation purposes. These Islands consist of three groups of big Islands such as Sulawesi (6 provinces), Maluku (2 provinces) and Papua (2 provinces). The model employed was Inter-Island Input-Output Model (IIIOM) developed using new hybrid procedures with special reference to Island economy. Data used for model were updated to Indonesian data for the year of 2015. The results show that firstly, the important sectors of Eastern Indonesias Island economy could be based on total multipliers and flow-on effects of output, income and employment. Secondly, important economic sectors could be based on sector-specific multipliers of output, income and employment, multipliers that occurred in own sector and other sectors. Thirdly, important economic sectors could be based on spatial-specific multipliers of output, income and employment, multipliers that occurred both in own region and other regions.

Keywords: Inter-Island Input-Output Model, Total and Flow-on Multipliers, Sector-Specific Multipliers, Spatial-Specific Multipliers