Title: The Relationship between the Supply of Electrical Energy and Economic Infrastructure and Environmental Security Conditions on the Number of Micro and Small Industries in Rural Areas in Indonesia
Author: Muhammad Dwi Prasetiyo
Affiliations : Master of Economics Program, Faculty of Economics and Business, Universitas Airlangga Surabaya, Indonesia
Publisher: Universitas Airlangga
Abstract
Micro and small industry (IMK) is the industrial sector that dominates the total number of non-agricultural businesses in Indonesia. This research aims to determine the role of the availability of electricity infrastructure and supporting infrastructure such as roads, business financing facilities, and markets as well as environmental security conditions on the development of the number of IMK in rural areas. This research also aims to determine the determining factors for the availability of electricity infrastructure at the village level. The data used is secondary data sourced from the 2014 and 2018 village potential data collection (Podes) by BPS RI. The research method uses pooled cross section regression with robust standard error. The availability of access to electricity sourced from PLN is the main factor that influences the number of IMK in rural areas. The increase in the number of IMK at the rural level is also influenced by the ease of access to villages, the good quality of land road surfaces, the availability of markets with permanent buildings and the availability of business financing facilities. The existence of crime does not affect the development of the number of IMK in rural areas. Geographical conditions and the quality of land roads determine the provision of electricity access at the village level. The provision of access to electricity is higher in rural areas where the majority of the population consists of more than one religion, more than one tribe or ethnicity and earns income from the non-agricultural sector and there are no class C excavation sites.
Keywords: Micro and small industry, Electricity Access, Environmental Security, Podes, Pooled Cross Section Regression
