Research Article
The Effect of Micro and Small Business (Mses) Performance on Inclusive Growth in Indonesia: Panel Dynamic Simultaneous Equation Model
@INPROCEEDINGS{10.4108/eai.3-8-2021.2315086, author={Agustina Suparyati and Sutyastie S. Remi and Kodrat Wibowo and Bagja Muljarijadi}, title={The Effect of Micro and Small Business (Mses) Performance on Inclusive Growth in Indonesia: Panel Dynamic Simultaneous Equation Model}, proceedings={Proceedings of the First Lekantara Annual Conference on Public Administration, Literature, Social Sciences, Humanities, and Education, LePALISSHE 2021, August 3, 2021, Malang, Indonesia}, publisher={EAI}, proceedings_a={LEPALISSHE}, year={2022}, month={1}, keywords={inclusive growth; poverty; micro and small enterprises; inequation; labor absorption}, doi={10.4108/eai.3-8-2021.2315086} }- Agustina Suparyati
Sutyastie S. Remi
Kodrat Wibowo
Bagja Muljarijadi
Year: 2022
The Effect of Micro and Small Business (Mses) Performance on Inclusive Growth in Indonesia: Panel Dynamic Simultaneous Equation Model
LEPALISSHE
EAI
DOI: 10.4108/eai.3-8-2021.2315086
Abstract
The purpose of this research is to analyze the role of MSEs in driving economic growth to realize inclusive growth, therefore the thinking flow in this study divides the analysis stage into 3 blocks of equation: the MSEs performance equation block, the economic growth block and the inclusive growth equation block. In this study used a panel dynamic simultaneous equation model for 33 provinces in Indonesia from 2010 to 2019 using the Generalized Method of Moments Arellano-Bond (GMM A-B) estimation method. The Economic Growth Equation Bloc refers to J.Shumpeter's growth theory which places enterprenership and innovation as the main factors influencing economic growth and the regression results show that the performance of MSEs has a significant effect on economic growth. The final stage of this study is analyzing the inclusive growth equation bloc which shows that economic growth supported by the performance of MSEs is able to increase labor absorption as well as reduce income distribution inequation but has not been able to lower the poverty level in other words that inclusive growth goals to lower poverty levels have not materialized in Indonesia.