Geographical Pattern of Economic Activities: An Evidence from Large and Medium Manufacturing Industries in Indonesia

Abstract

The aim of this paper is to analyze geographical pattern of economic activities from an evidence of large and medium manufacturing industry in Indonesia. By utilizing data for manufacturing industry for the 2010–2015, the exploratory spatial data analysis is applied to identify geographical distribution of economic activities. The result indicates that the spatial distributions of manufacturing industries are unevenly distributed indicating the clustered phenomenon pattern. A high concentration of manufacturing industries is depicted in several provinces, as well as in Java Island. The Moran’s I tend to decrease along the period of study. From the LISA, is apparent that there was a statistically significant high clustering. Only some provinces indicate significant clustering, such as in west Java, Banten, DKI Jakarta, and Central Java. The result of LISA indicates a positive spatial autocorrelation in research area revealing the existent cluster of economic activities. This paper attempts to contribute theoretical thought as well as empirical notes on spatial concentration in Indonesia. The researchers utilize spatial approach by taking spatial dependence among region units explicitly into account in peeling phenomenon of geographical concentration of manufacturing industry in Indonesia