Three essays on the structural changes and service industry of Indonesia: Macro, meso and micro perspectives

This dissertation comprises three essays representing three perspectives on viewing structural changes in the economy: macro, meso, and micro perspectives. The main objective of the first essay is to analyze changes in the pattern of intersectoral linkages, whether the changes were generated by changes in final demand or technology, or whether the linkages indicate an early sign of hollowing out phenomenon in the national economy. Using block structural path analysis (BSPA) as a complement to standard structural path analysis (SPA), it has been found in the study that changes in intersectoral linkages was characterized by deepening intrasectoral linkages. The decomposition of goods and service sector shows that service sector still played a dominant role in generating factorial and institutional income. Structural change in the Indonesian economy were characterized by increasing share of labor income compared to capital income in block matrix of institutions, and income distribution tended to move to the increase of agricultural households. The relationship between goods and services indicates that services sector is not independent from the good sectors.;The objective of essay two is to analyze the change in the hierarchy of forward and backward linkages when a region is considered as an isolated region, isolated from the influence of other regions in a national system. The change of the hierarchy reflects the degree of the region to influence national system. The study found that the change in the hierarchy occurred at both spatial and temporal level. At spatial level, it has been found that most of the changes in the hierarchy in service sector in Jawa within the domain of national economy that indicate the domination of services if Jawa is included in the economy.;The objective of the third essay is purposed to reveal interregional structure of regional economies using interregional social accounting matrix. Using 1995 five-region interregional SAM, it was found that self-generating income and output of Jawa is larger than any other macro regions, and the linkages between Jawa and with four other macro regions is stronger than among the four regions themselves. Changes in final demand in Outer-Jawa will generate income and output from Jawa. The decomposition of goods and service sector show that the demand for services was not necessarily generated by internal region, but also indirectly generated through other regions, especially in Jawa. More than 50% demand for services in Other was generated in Jawa.