Role of Agriculture Sector on the Economy of East Java Province, Indonesia (Input-Output Analysis)

Authors : Silas T. Redu, Agnes Pudjiastuti, - Sumarno

Pages : 90-108

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Publication Date : 2020-10-26

Article Type : Research

Abstract :The purpose of this research was to analyze backward linkage, forward linkage, and analyze the economic impact that agriculture sector has caused based on the multiplier effect on the output, income, and absorption of labor in the Province of East Java. Data used was sourced from Table Input-Output domestic transactions based on price classification of 110 sectors East Java Province year 2015 which is aggregated into a classification of 14 sectors. Results of the analysis showed index of degrees of sensitivity (backward linkage) of agricultural sector had a value of 0.795, below average degree of sensitivity of entire economic sector. Agricultural spread power index (forward linkage) had a value of 0.803 lower than average of spread power index of the entire sector. Output multipliers, income multipliers, and labor multipliers of agricultural sector respectively, i.e. 1.259, 1.203, and 1.094 lower than other sectors in the economics of East Java Province. This indicated that agricultural sector serves as a supporting sector instead of leading in the economy of East Java Province.
Keywords : Agriculture, backward linkage, forward linkage, multiplier effect