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Purpose – The purpose of this paper is to calculate the net gains or losses for the ASEAN Members 1998-2007 in the East Asian market. Design/methodology/approach – This paper provides a new extension to the shift-share analysis to attribute the net shift to competing economies with a dynamic approach. This new extension is applied to analyze the competition among the ASEAN members in the East Asian market for the year from 1998-2007. Findings – Although in terms of market share, Indonesia and Malaysia take the lead in East Asia, the dynamic shift-share analysis suggests that the Philippines, Thailand and Malaysia are gainers during 1998-2007, with positive net shifts and positive competitiveness effects. Originality/value – There are two main contributions of this paper: one is to dynamically estimate the net shifts of the economies as compared to the traditional comparative static approach; the other is to extend the shift-share analysis to attribute the net gains or losses to competing exporters. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to evaluate the performance of six types of policy rules applied for Indonesia, using monthly data spanning January 1980 to December 2008. Design/methodology/approach – This paper uses deterministic simulations on a small macro model and evaluates the policy rules based on the loss function. Findings – Among six types of policy rules, an inflation forecast-based rule with contemporaneous output gap (IFBG) is found to be the most efficient rule for Indonesia. The rule suggests that the central bank should react strongly to inflation deviations from the target, react moderately to the output gap and smooth the interest rate. The optimal horizon is 3-4 quarters. Including the exchange rate in the policy rule causes deterioration in economic performance. Originality/value – No previous study examines Indonesia employing the same methodology. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to examine the factors affecting profitability of pharmaceutical company in Indonesia. While research and development has been the main discussed issues in pharmaceutical sector development, scant attention has been paid to profitability factors determined by financial ratio specifically. The industry itself faces significant disruption with the implementation of universal health coverage in Indonesia. This study investigates the factors affecting profitability in an Indonesian pharmaceutical company after the national health insurance policy implementation. Design/methodology/approach: This research is based on five independent variables (IVs) with six measurements that were empirically examined for their relationship with profitability. These variables are firm size (as measured by total sales), company efficiency (assets turnover), liquidity (current ratio), market power (the Lerner index) and a firm's growth (as measured by sales growth and sustainable growth rate). Data of ten pharmaceutical companies listed on the Indonesia Stock Exchange covering the period of 2014–2018 were extracted from companies' annual reports. Pooled ordinary least squares regression and fixed effects were used to analyze the data. Findings: The findings show strong and positive relationships between liquidity and sustainable growth rate with profitability as measured by return on equity (ROE), return on assets (ROA) and earning per share (EPS), except EPS for liquidity. Further, both firm size and market power show positive significant relationships with ROA but negative significant relationships with EPS. Sales growth and company efficiency (as measured by assets turnover ratio) have no significant relationship with profitability. Research limitations/implications: Due to data availability, the data include only listed pharmaceutical companies in the Indonesia Stock Exchange. Practical implications: These results benefit internal users (such as managers, shareholders and employees). They can realize the determinants of enhancing the profitability of their company after the implementation of universal health coverage from the Indonesian government (JKN – Jaminan Kesehatan Nasional) since 2014. On the other side, other external users (such as investors, creditors, newly established pharmaceutical companies and tax authorities) also may get advantages of these results. It is clear that a significant impact happened upon this new policy implementation, and how an Indonesian pharmaceutical company will be profitable in the future. The relevance of company's business strategy (product and customer portfolio, competitor intelligence, etc.) with the profitability factors from this study can be further scrutinized as further consideration for both internal and external users. Originality/value: This study differs from previous studies in many ways; first, it focuses on pharmaceutical companies in Indonesia. Previous studies have concentrated on different countries and companies in other sectors, such as services, banking and financial institutions or on industrial organizations. Second, this study analyzes the data from pharmaceutical companies' annual reports since 2014. There was a significant event of universal health coverage (national health insurance) implementation from the Indonesian government. Third, the study used ROE, ROA and EPS as indicators of profitability. Last but not least, the results of the study provide empirical evidence that firms with significant market power, good liquidity and well-managed sustainable growth rate improve operating income and ultimately enhance profitability. [ABSTRACT FROM AUTHOR]

Purpose — The fact that previous studies regarding the effects of social violence on foreign direct investment (FDI) flows come to contradictory conclusions motivates this paper. Therefore, it seeks to investigate the social violence-FDI relationship in an ethnically heterogeneous and resource-rich country, Indonesia. Design/methodology/approach — The theoretical framework of the paper examines the social violence-FDI relationship and identifies the circumstances under which social violence in the host country adversely affects FDI inflows. The empirical analysis uses a unique dataset that consists of FDI flows and different types of social violence in 26 provinces of Indonesia during the period 1992-2001. A fixed-effects regression is applied to estimate the effects of social violence on FDI flows in Indonesian provinces. Findings — The results indicate that only certain types of social violence such as ethnic and industrial relations violence are detrimental to FDI. Multinational firms seem to differentiate among the several types of social violence and respond only to those that may affect their expected future profits. Practical implications — The immediate policy implication of this result implies that developing countries having the desire to attract FDI flows should be aware of the fact that multinational firms seem to differentiate among the several types of social violence and respond only to those that may affect their expected future profits. Originality/value — This paper contributes to the literature in two ways. First, the dataset employed in the empirical analysis is unique in that it contains different types of social violence and associated damage in a country. Second and because of the first point, the empirical findings provide an explanation of the conflicting results reported in the literature regarding the social violence-FDI relationship. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to examine the effects of minimum wage on youth employment across employment statuses in Indonesia. This study uses the National Labour Force Survey (Sakernas) from 2010 to 2012. Design/methodology/approach – This study uses a multinomial logit model to see the youth distribution across different employment status changes as a result of an increase in the minimum wage. Five categories of youth employment statuses are examined including self-employed; unpaid family workers; paid employees in the covered sector; paid employees in the uncovered sectors; and unemployed. The model is examined separately for urban and rural areas, as well as for the male and female youth labour market. Findings – The results generally suggest that an increase in minimum wage decrease the probability of youth being employed in the covered sector, i.e. paid employment in the covered sector and increase the probability of youth being employed in the uncovered sectors, including self-employed, unpaid family workers, and paid employment in the uncovered sectors. This study indicates a displacement effect for youths from the covered sector into the uncovered sector as suggested by the two-sector model. The specific results are different across urban and rural labour markets, as well as across males and females. Originality/value – Compared to the developed country studies, the studies on the effects of minimum wage on youth employment in developing countries is relatively limited. The sample from Indonesian labour market with a large informal sector has never been used for these purposes. This study also contributes to the literature by using the particular definition of the covered-uncovered sector to the Indonesian labour market based on the employment status and individual wage data. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to investigate the technical efficiency (TE) of micro and small enterprises (MSEs) and its determinants in the Indonesian manufacturing sector covering comprehensive subsectors. Design/methodology/approach: This research uses the data from the micro and small industry survey sourced from the Indonesian Bureau of Central Statistics for the period 2010–2015. The TE is estimated using data envelopment analysis (DEA) with bootstrapping approach. The TE is also estimated at the firm-level survey data, classified at the five-digit level of the International Standard Industrial Classification system. In addition, a truncated regression model is applied to estimate the effects of the determinants on the TE. Findings: This research finds that there is a low average TE of the MSEs for the subsectors investigated. It is also found that the TE is associated with firm size, location, export orientations on domestic and world markets, firm age, level of technology, and owner education. Originality/value: The literature investigating the TE of the MSEs and its determinants is still rare in Indonesia. Most of the previous research limited the studies for specific subsectors and/or specific small regions. Therefore, this research has a contribution in measuring the TE of the MSEs for comprehensive subsectors as well as its relation with the determinants in the Indonesian manufacturing sector. Also, the DEA with bootstrapping approach is applied to estimate the TE of the firms based on each relevant subsector, which is rare in the previous research of the Indonesian MSEs. [ABSTRACT FROM AUTHOR]

Purpose - The purpose of this paper is to empirically investigate the money demand function for five Southeast Asian countries, viz. Malaysia, Thailand, Singapore, the Philippines, and Indonesia. Design/methodology/approach - The ARDL modeling approach is employed because of its ability to incorporate both 1(0) and 1(1) regressors. Findings - The results reveal that real M2 aggregate, real expenditure components, exchange rate, and inflation rate are cointegrated for Malaysia, the Philippines, and Singapore. The statistical significance of real income components suggests the bias of using single real income variable in money demand (M2 aggregate) specification of both short- and long-run. The CUSUM and CUSUMSQ tests show that the estimated parameters are stable for the five Southeast Asian economies, except for Indonesia which is based on short-run specification. Practical implications - These findings are important for policy makers in formulating monetary policy. Originality/value - Besides conventional determinants of money demand such as exchange rate and interest rate variables, this study considers the major components of final expenditure (GDP) - final consumption expenditures (private and government sectors), expenditures on investment goods, and exports as scale variables. [ABSTRACT FROM AUTHOR]