Inter-Sector and Inter-Country Linkages in Indonesian Economy: World Input-Output Analysis

Abstract

Results of analysis on inter-sector and inter-country linkages in Indonesian economy using world inputoutput data are presented in this paper. The model was aggregated from 56 sectors and 43 countries into 30 sectors and 8 countries. Inter-sector linkages are analyzed using forward and backward effect indices. Meanwhile inter-county linkage is analyzed by spill-over and feed-back effects. The results showed thatfirstly, number of sectors include in Group-1, namely key sectors with strong forward and backward linkages: two sectors in year 2000, one sector in year 2005, 8 sectors in year 2010 and 2014. Secondly, spill-over effects were significantly importance in Indonesia economy, as around 20 per cent of multipliers occurred in other countries. Only small feed-back effects are in Indonesian economy. Finally, ignoring inter-country feed-back could be misleading as error created was significant. Keywords: inter-sector linkages, inter-country linkages, world input-output tables, Indonesian economy