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Linkages, Multiplier Effects of Textile and Clothing Industry in Java from Global Trade Perspective: Inter-Regional Input-Output Analysis

In: Proceedings of the International Conference on Contemporary Risk Studies (ICONIC-RS 2025)

Author

Listed:
  • Iklimah Nur Rachmah

    (Universitas Pertamina, Faculty of Economics and Business)

  • Eka Puspitawati

    (Universitas Pertamina, Faculty of Economics and Business)

  • Andika Pambudi

    (Universitas Pertamina, Faculty of Economics and Business)

  • Yuri Mansury

    (Illinois Institute of Technology)

Abstract

This study analyzes the strategic role of the textile and clothing industry in Java through sectoral linkages and multiplier effects analysis, considering strategic risks within the context of global trade. This study uses Indonesia’s Inter-Regional Input-Output (IRIO) table data according to 6 islands and 52 industries in 2016, sourced from Statistic Indonesia. The results indicate that the textile and clothing industry in Java has a backward linkage of 0.51. The multiplier output value of 1.92 indicates that every 1 million rupiah increase in final demand for this industry will drive the growth of output across all sectors by 1.92 million rupiah. Meanwhile, the labor multiplier value of 0.070 reflects the labor-intensive role of this sector and its significant potential in job creation. This condition is particularly vulnerable to changes in global trade policy, fluctuations in the price of imported raw materials, and protectionist policies in major export destination countries. For this reason, mitigation strategies are needed to maintain the sectors’ stability in the face of uncertain global dynamics.

Suggested Citation

  • Iklimah Nur Rachmah & Eka Puspitawati & Andika Pambudi & Yuri Mansury, 2026. "Linkages, Multiplier Effects of Textile and Clothing Industry in Java from Global Trade Perspective: Inter-Regional Input-Output Analysis," Advances in Economics, Business and Management Research, in: Eka Puspitawati & Dewi Hanggraeni & Indra Kusumawardhana & Parulian Sihotang & Nanda Nurdianto (ed.), Proceedings of the International Conference on Contemporary Risk Studies (ICONIC-RS 2025), pages 69-85, Springer.
    • Handle: RePEc:spr:advbcp:978-2-38476-595-9_6
    DOI: 10.2991/978-2-38476-595-9_6
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