Title: INFLUENCE OF SECTORAL ECONOMIC ACTIVITIES ON INVESTMENT AND LABOR ABSORPTION AND DISTRIBUTION OF COMMUNITY INCOME IN BATAM CITY
Author: ASMAN ABNUR
Item Type : Thesis (Thesis)
Affiliations: Master of Management Study Program, Faculty of Economics and Business, Universitas Airlangga , Surabaya, Indonesia
Publisher: Universitas Airlangga
Abstract
The sustainability of development in a region is greatly influenced by investment activities invested in the region concerned. To realize these investment activities, a region, apart from relying on internal capital potential, must also seek capital inflows from outside for investment activities. The occurrence of capital inflows requires the attraction of investment in economic sectors in the region concerned. Apart from that, it is hoped that developing sectoral economic activities will also be able to generalize the capital surplus needed for continued investment activities in the area concerned. The results of this research show that for the case of Batam City, the existing economic sectors have a significant influence on investment activities. namely the industrial sector, the building sector and the transportation sector. Meanwhile, the financial sector and trade sector apparently have no significant influence on investment activities carried out in Batam City. The influence of the industrial sector is due to the dominance of this sector as an economic driver in Batam City. The results of this research are in line with the results of a study conducted by Bappeko Batam using LQ analysis and the Wilkinson Index, which shows that the industrial sector is the most dominant base sector and is a specialization of the Batam City economy. As for the building sector and the transportation sector, although they have a significant influence on investment, however, is negative, indicating a trade-off relationship between investment and these two sectors. For the building sector, the negative nature of the relationship between the development of this sector and investment is thought to be due to the slowness of this sector in providing results or profits for investors. Apart from that, considering the limited number of consumers in this sector, this has become a constraint in accelerating capital turnover in this sector. Meanwhile, for the transportation sector, the negative relationship between this sector and investment shows that the development of this sector in Batam City is relatively not optimally integrated with other sectors. In the type of land transportation, high and uncontrolled development in this sector can actually cause congestion problems, which will increase the social costs that must be borne by the regional economy and also cause a decline in attractiveness. Meanwhile, other sectors, namely the financial sector and the trade sector, show an influence which is not significant for investment in Batam City. The insignificant influence of these two sectors is estimated to be due to the relatively large added economic value generated by Batam City flying out, as well as the relatively high dependence of Batam City on capital supplies from outside Batam. Apart from that, the relatively low level of public savings compared to the growing investment needs has caused Batam City to become increasingly dependent on capital outside Batam. The results of this research also show that investment in Batam City does not have a significant effect on labor absorption in Batam City. It is estimated that investment has no effect on labor absorption because investment activities carried out in Batam City in most economic sectors (such as industry, tourism, transportation and others) are capital intensive. The influence of labor absorption on the formation of added value and income distribution is significant. This can be understood considering that an increase in labor absorption means an increase in aggregate regional income which will then increase the formation of added value in the region concerned. Apart from that, increasing labor absorption will also reduce the number of unemployed, which means that more members of society will receive income from a region's economy.
Keywords: Balanced Growth is better than Balanced Development
Sources: http://repository.unair.ac.id/35465/
