Digital-related economy sectors and regional economy disruption
While the study of the regional economy and its factors has been well-researched, relatively less is known on the issues for the digital economy sectors affecting the regional economy. Therefore, the aims of this paper are: to investigate the regional economic impact caused by digital economy sectors; to analyze the multiplier effect of these sectors on the output, income, and employment; and to calculate the economic impact of additional investment in the digital economy sectors. The study focuses on the region of East Java Province, Indonesia. The method used in this study is the input-output analysis (13 x 13 aggregation), which generates transaction of goods and services at a certain time. This study uses data from the Central Bureau of Statistics, Input-Output Table of East Java Province year 2015, which includes 110 economic sectors, which are then grouped into digital related and non-digital related sectors. The result indicates that digital economy sectors have both backward and forward linkages to other sectors in the region. Further finding shows that digital related manufacturing sector has the highest multiplier effect on the output, income, and employment. While investment injection on the digital economy sectors, based on the analysis, will make better disruption on East Java economy. The government of the region should put an emphasis to attract more investment in the digital economy sectors.
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