The potential of interprovincial money laundering in Indonesia: investigation on the attractiveness and destination choice

Agung Andiojaya, Aqsal Rizky Ramadhani, Riana Rizka and Fayota Prachmasetiawan

Journal of Money Laundering Control, 2025, vol. 28, issue 1, 215-234

Abstract: Purpose - The purpose of this study is to ascertain the level of attractiveness of each province in Indonesia as a potential destination for money laundering activities originating from Jakarta. Design/methodology/approach - Adopting a quantitative approach, this study uses the Walker Gravity Model, which has been modified in two key components: the attractiveness and distance variables. The first modification is achieved by using proxy economic variables, for which data is available at the provincial level within a country. The utilization of proxy data serves to circumvent certain data limitations inherent to the original model, which is only accessible at the country level. The second modification is introduced to the distance component, wherein this study develops a distance index that is deemed to be more representative than physical distance used in the original model. Findings - The research findings indicate a notable correlation between economic activity and the risk of money laundering, with provinces in closer proximity to Jakarta exhibiting a higher likelihood of being targeted for money laundering activities. However, there are exceptions for some provinces that, despite their distance from Jakarta, also demonstrate a high potential for money laundering due to their strong economic ties to the capital city. Originality/value - The existing studies on money laundering attractiveness, extent and flow at the provincial level in Indonesia using quantitative approaches are limited. This paper provides new insights into the economic and governance landscapes of Indonesian provinces, highlighting the need for tailored anti-money laundering strategies.

Keywords: Money laundering; Walker gravity model; Indonesia province; Inter-provincial money laundering; C23; F52; K24; O17; R12; K24; R12; O17; F52; C23; K24; R12; O17; F52; C23 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:jmlc-04-2024-0080

DOI: 10.1108/JMLC-04-2024-0080

Access Statistics for this article

Journal of Money Laundering Control is currently edited by Dr Paul Gilmour

More articles in Journal of Money Laundering Control from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().