S-Space College of Social Sciences (사회과학대학) Institute of Economics Research (경제연구소) Seoul Journal of Economics (SJE) Seoul Journal of Economics vol.31 no.1~4 (2018)
Do Infrastructures Influence the Efficiency Convergence of the Indonesian Economy?
- Issue Date
- Seoul Journal of Economics, Vol.31 No.3, pp. 333-353
- In the last 10 years, Indonesia has set its infrastructure development to support the economy. Infrastructure, as the vital part of development, contributes to economic performance proxied by technical efficiency. This research aims to examine the role of infrastructure (water, electricity, and roads) toward the convergence of technical efficiency. Data from 33 provinces of Indonesia for the period of 2008–2015 were analyzed using stochastic frontier analysis (SFA) and generalized method of moments (GMM). Results show that technical efficiency converged during the period of interest. Further investigation suggests that water, electricity, and roads exert an important influence on the emergence of efficiency growth and its convergence.