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The Roles of Entrepreneurship on Regional Economic Growth in Indonesia

Author

Listed:
  • Nurmalia

    (Ministry of Trade)

  • Djoni Hartono

    (Universitas Indonesia
    Universitas Indonesia)

  • Irfani Fithria Ummul Muzayanah

    (Universitas Indonesia)

Abstract

New endogenous growth theory introduces how investment in knowledge and human capital contribute to economic growth through spillover of knowledge. However, the theory has limitation because it does not explain the cause and the mechanism of how knowledge spillover occurs. Accordingly, by employing panel data of 33 provinces in Indonesia over the period of 2008–2013 and fixed effect method, this paper aims to investigate the roles of entrepreneurship on regional economic growth in Indonesia. The study applies different approaches to measure the entrepreneurial activities based on GEM categories, namely, self-employment rate and business ownership rate as indicators of entrepreneurial productivity. Furthermore, a more specific analysis is conducted by identifying entrepreneurial activities into formal sector and informal sector. The estimation result indicates that entrepreneurial productivity plays a significant role on regional economic growth in Indonesia. Moreover, entrepreneurial activities in different sectors give different contributions on the economic growth.

Suggested Citation

  • Nurmalia & Djoni Hartono & Irfani Fithria Ummul Muzayanah, 2020. "The Roles of Entrepreneurship on Regional Economic Growth in Indonesia," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(1), pages 28-41, March.
    • Handle: RePEc:spr:jknowl:v:11:y:2020:i:1:d:10.1007_s13132-018-0557-6
    DOI: 10.1007/s13132-018-0557-6
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    Cited by:

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    2. Ade Paranata & Pahrudin & Syamsiyatul Muzayyanah & Thi Ha Trinh, 2023. "Identification of factors influencing entrepreneurial behavior: unveiling start-up business initiatives in Indonesia," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-12, December.
    3. Khanh Hung DOAN, 2021. "The Role Of The Vietnamese Education System In Starting A Business," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 30(2), pages 77-88, December.

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