DETERMINANTS OF LABOR PRODUCTIVITY IN ASEAN-6 COUNTRIES: USING DYNAMIC PANEL SYS-GMM

Tasya Dandi (), Yunisvita () and Dirta Pratama Atiyatna
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Tasya Dandi: Universitas Sriwijaya, Indonesia
Yunisvita: Universitas Sriwijaya, Indonesia
Dirta Pratama Atiyatna: Universitas Sriwijaya, Indonesia

Eurasian Journal of Economics and Finance, 2024, vol. 12, issue 2, 83-92

Abstract: Labor productivity is an important issue to be discussed in the economic development of each country including in ASEAN-6, the differences in labor productivity levels among ASEAN-6 countries need to be researched further, therefore the purpose of this study is to determine the effect of human development index, labor force participation rate, foreign direct investment, and exports on labor productivity in ASEAN-6 countries, and also see the long-term and short-term effects. The data used consists of time series data from 2005 to 2022 and cross-sectional data from ASEAN-6 countries, using the dynamic panel SYS-GMM method. The results show that the human development index and foreign direct investment have a significant positive effect on labor productivity in ASEAN-6 countries, while the labor force participation rate and exports have a negative effect on labor productivity in these countries. In the long run, the human development index, labor force participation rate, foreign direct investment, and exports have a 7 times greater influence on labor productivity than in the short run, indicating a multiplier effect. Then the most dominant variable affecting labor productivity is the human development index.

Keywords: Labor Productivity; Human Development Index; Labor Force Participation Rate; Foreign Direct Investment; Export; SYS-GMM (search for similar items in EconPapers)
Date: 2024
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