Investment Improvement of Agricultural Sector in East Java: Input- Output Analysis

Muryani
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Muryani: Faculty of Economics and Business, Universitas Airlangga, Indonesia.+6231 5036 584

International Journal of Research in Business and Social Science (2147-4478), 2019, vol. 8, issue 4, 215-223

Abstract: The Agricultural Demand Led Industrialization (ADLI) strategy can be considered effective because of the dominant amount of East Java land (74.11%) cultivated for the agricultural sector. This study aims to determine the relationship between the agricultural and manufacturing industry sectors; knowing the impact of the “Agricultural Demand Led Industrialization†(ADLI) strategy in the East Java economy; and knowing the elasticity of agricultural investment on output creation, gross value added, and income in East Java. This research uses the Input-Output (IO) analysis technique for all economic sectors in East Java, with an emphasis on the agricultural sector and processing industry in 1995-2010. The empirical results state that the ADLI Strategy has a positive impact on output creation and income in the East Java economy. The level of sensitivity /response from the output, gross value added, and income due to changes in investment value in the agricultural sector is relatively not much different. Key Words:ADLI, Agriculture, Industry, Input-Output

Date: 2019
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