Journal of Developing Economies

The Role of Socioeconomic and Female Indicators on Infant Mortality in West Nusa Tenggara: A Panel VECM Analysis

Tue, 04 Jun 2024 00:00:00 +0700

West Nusa Tenggara Province has an infant mortality rate that surpasses the national average. Additionally, it is also characterized as having a high Gini ratio and gender inequality index. Therefore, this study aims to examine the differences in classification among different regions, the long-term and short-term impact, and the causal relationship between socio-economic factors and female indicators in relation to infant mortality. This study used the co-integration method of the panel VECM and applied the natural breaks (Jenks) classification method based on panel data from 10 regencies/cities in West Nusa Tenggara Province between 2012 and 2022. This study discovered two instances of co-integration where the life expectancy of women was found to have a negative impact, while the percentage of women working full-time was found to have a positive impact on the long-term infant mortality rate. Infant mortality rates in the short term showed a significant relationship with the cointegration coefficient, mean years of schooling of women, life expectancy of women, and percentage of women working full-time. There is a direct causal relationship between the mean years of schooling of women and the percentage of people living in poverty and the infant mortality rate. This study is expected to serve as a basis to guide the Government of West Nusa Tenggara Province in promoting equity in education, equal job opportunities, adequate healthcare facilities, and increased investment to decrease infant mortality.

The Impact of Korean Wave on South Korea's Export of Consumer Goods to ASEAN-5 Country

Alyssa Chiara Handini Tandy, Rossanto Dwi Handoyo — Tue, 04 Jun 2024 00:00:00 +0700

This study aims to assess the impact of the Korean Wave on the export of consumer goods from South Korea to the ASEAN-5 countries (Indonesia, Malaysia, Thailand, Singapore, and the Philippines) from 2010 to 2020. This study took into account various factors to analyze the export dynamics, such as gross domestic product (GDP) per capita, interest rates, Google search trends, and the geographical distance between countries. Cultural goods exported from South Korea were used as a measure of the Korean Wave, employing the gravity model and the fixed effects model (FEM) for analysis. The results of this study indicated a positive impact of the Korean Wave variable on the export of South Korean consumer goods. Additionally, the findings revealed that variables such as South Korea's GDP per capita, distance, and exchange rates had a negative impact on the export of such goods. Furthermore, this study highlights the positive impacts of the ASEAN-5 countries' GDP per capita and Google search trends on the export of South Korean consumer goods.

The Role of Economic Development in Export Performance in Islamic Countries

Vita Kartika Sari, Umi Karomah Yaumidin — Tue, 04 Jun 2024 00:00:00 +0700

The necessity for a reevaluation of international trade has become increasingly apparent, particularly in Islamic countries. This study aims to estimate the economic development of selected Islamic countries, namely Egypt, Indonesia, Malaysia, Pakistan, Turkey, the United Arab Emirates, Brunei Darussalam, and Kuwait, in terms of export performance. This study was conducted within the broader context of Islamic countries, with a specific focus on analyzing dynamic panel data from 2010 to 2019. The dependent variable included exports of goods and services, while the regressors included GDP growth, broad money, and inflation. An estimation based on the panel generalized method of moments revealed a significant effect of export (-1) on export, a significant and negative impact of broad money on export, and a significant and positive effect on inflation. In contrast, GDP growth was not found to be significant. These findings are consistent with the high number of global Muslim consumers and the growth of Islamic finance assets. Currently, Islamic countries are prioritizing product diversification for both the Muslim and global markets. These findings indicate the need for increased economic development to achieve the practical implications of sustainable economic growth in Islamic economies.

Women's Participation in Governance: A Quick Fix to Development Constraints in Sub-Saharan Africa?

Tue, 04 Jun 2024 00:00:00 +0700

The inhuman socioeconomic repercussions of corruption and bad governance inherent in successive male-dominated governments have generated agitation for increased women's participation in governance. Primarily, this agitation is based on the premise that women are less inclined to corruption, which is a major impediment to good governance. Given the notoriety of these two impediments to development, this study aims to investigate the relationship between women's participation in governance, corruption, and quality of governance in sub-Saharan Africa from 1996 to 2021. This study analyzed annual panel data of four sub-Saharan African countries using the autoregressive distributed lag model and the Granger causality test. Governance quality was proxied by government effectiveness, while women's participation in governance and corruption were proxied by the number of women in government positions and control of corruption, respectively. Economic development and institutional quality were used as control variables. The findings revealed negative main and interaction effects of women's participation in governance and corruption on governance quality, unidirectional causality from corruption to women's participation in governance and from governance quality to women's participation in governance, and bidirectional causality between corruption and governance quality. Quantitative increases in women's participation in governance and corruption exacerbates governance quality. Women's ability to participate in governance is determined by the prevalence of corruption in previous years. Anticorruption campaigns that focused on women's participation in governance often result in reductions in corruption insufficient for improvement of governance quality. Corruption and bad governance are mutually reinforcing. Governance quality determines women's participation in governance. To minimize corruption and bad governance, sub-Saharan African countries should shift their focus away from merely increasing the number of women in government positions to building strong institutions capable of creating a meritocratic political and socioeconomic environment in which selfless women and men have equal chances of being elected or appointed to public offices.

Digital Adoption and Women in the Labor Market: Indonesia's Case

Wahyuni Andriana Sofa, Realita Eschachasthi — Tue, 04 Jun 2024 00:00:00 +0700

Although the advantages of digitalization are frequently mentioned, there is still a persistent gender disparity in labor participation, especially in developing nations. This study examines the extent to which digitalization guarantees gender equality. Specifically, it aims to analyze the impact of internet usage on women's involvement in Indonesia's workforce. This study additionally examines the impacts in various parts of the country. Through the use of panel Tobit regression, utilizing district-level data obtained from SUSENAS-KOR, SAKERNAS, and INDO-DAPOER for the years 2017-2019, we have discovered a noteworthy and positive correlation between the utilization of the internet and the participation of women in the labor force. The observed effect remains strong even after accounting for additional factors. The heterogeneity analysis indicates that the correlation between internet usage and female labor force participation is more pronounced in the Java region than in areas outside Java. However, obstacles still prohibit women from accessing the advantages of digitalization. Hence, the proposed policy entails prioritizing equitable internet access and diminishing the obstacles to women's participation in the labor market to attain gender equality.

Micro and Small Enterprises' Export Competencies and Cooperation in Indonesia

Tulus Tahi Hamonangan Tambunan — Tue, 04 Jun 2024 00:00:00 +0700

Micro, small, and medium enterprises (MSMEs) have an important role in Indonesia to play not only as a source of employment but also growth of gross domestic product (GDP) and exports, specially manufactured goods such as garments, food, footwear, electronics, and crafts. To support MSME exports, the Indonesian government hopes to build stronger collaboration with them. Many journal articles regarding exports of MSMEs have been executed in developing countries. However, no research has been conducted concerning the cooperative role of MSMEs in supporting their exports. Therefore, this descriptive study filled the gap by analyzing the cooperation of MSMEs in supporting their exports in Indonesia by analyzing secondary data from the 2019 Profile of Micro and Small Industries (MSIs) in the Manufacturing Industry from the Indonesian Statistics (BPS) and online database from the Indonesian Minister of Cooperative and Small and Medium Enterprise. Although the data does not provide further information regarding how many MSEs are members of cooperatives who export, the scatter plot in this study shows that there is a positive relationship between the number of MSEs who export and the number of MSEs who are members of cooperatives. Even though other factors had a stronger influence on export competencies, cooperatives still supported MSEs to export their goods. This study contributes to more substantial empirical evidence on the relationship between cooperatives and MSMEs in Indonesia and developing countries.

Socioeconomic Dynamics and Poverty Rate in East Java: A Panel Regression Investigation

Nabilah Sa'diyah, Laila M. Pimada — Tue, 04 Jun 2024 00:00:00 +0700

Economic development can be described as a process of system or non-social system in order to achieve a better condition. It is often related to public welfare as evidenced by the poverty phenomenon experienced by the population. The population growth in a country must be controlled in order to prevent a threat to the country's welfare, since an increase in the population will lead to an increase in the need for fulfillment. This condition should be balanced with a proper income alignment. East Java Province has the second highest population in Indonesia. In fact, this condition has had an impact on the economic development process, particularly in East Java, where there has been an increase in the poverty rate. Over the past decade, the poverty rate in East Java has fluctuated. It showed an increase in a few years, namely 2015, 2020, and 2021, with an average increase of 0.88%. This study aims to identify the effects of several factors on the poverty rate in East Java between 2017 and 2022. Furthermore, this study used a quantitative method with a panel regression analysis. The independent variables included open unemployment rate, labor force participation rate, minimum wage, and education level. This study found that open unemployment rate and minimum wage affected poverty rate. In contrast, labor force participation rate and education level did not affect poverty rate.

Estimating The Financial Repression Index for The Economy of Bangladesh: A Principal Component Analysis

Md Yousuf — Tue, 04 Jun 2024 00:00:00 +0700

Financial repression was a common practice in the past, but it became less common during the liberalization era of the 1980s and 1990s. With the rise in financial sector vulnerability following the Asian financial crisis, the Global Financial Crisis, and the COVID-19 pandemic, repressive policies have once again become popular. Bangladesh, for instance, has imposed administrative interest rate ceilings. This study aims to assess the extent of financial repression on the economy of Bangladesh, using annual time series data spanning from 1973 to 2022. An aggregate financial repression index was calculated using the principal component analytical method, including the major policy variables such as real deposit rates, interest rate restrictions, capital account restrictions, the share of state-owned commercial banks in total loans, and statutory liquidity ratio. The reliability and validity of the results were tested by comparing them with the index calculated using different policy variables. The index of financial repression indicates that Bangladesh's financial sector has undergone considerable liberalization, yet it remains subject to some degree of repression. In recent times, financial repression has intensified, particularly following the imposition of lending rate ceilings in the wake of the outbreak of the COVID-19 pandemic. Policymakers are in a position to take proper measures to liberalize the financial sector and ensure financial stability.

The Effect of Uncertainty on Inflation: Evidence in ASEAN

Andi Tiara Putri Marasanti, Kiki Verico — Tue, 04 Jun 2024 00:00:00 +0700

This article examines the relationships between extreme poverty, economic growth, and inequality, assesses if changes in inequality dampen the impact of income on extreme poverty, and determines the magnitude of the inequality growth trade-off index in Costa Rica, the Dominican Republic, and Honduras. A country-specific ARDL bound regression was conducted. The findings indicate the presence of direct and indirect dampening impacts of changes in inequality on income growth and extreme poverty reduction. The magnitude of the inequality growth trade-off- index indicates whether to prioritize growth and/or inequality reducing policies. This means that the higher the inequality, as in Honduras, the higher the economic or average income growth rate required to compensate for the increase in inequality to achieve a given level of extreme poverty reduction. Accordingly, there is no one-size-fits-all policy approach to tackling extreme poverty.

Poverty and Inequality Dynamics: Measuring Dampening and IGTI in Three CAFTA-DR Countries

Manuel Vanegas, Terry Roe — Tue, 04 Jun 2024 00:00:00 +0700