Analysis of the Tourism Sector in Indonesia using Input-Output and Error-Corrections Model Approach.

Albert Hasudungan*, Dewa Gede Sidan Raeskyesa, Erica Novianti Lukas, Fati Ramadhanti

*Corresponding author for this work

Publication: Scientific journalJournal articlepeer-review


This research explores the role of the tourism sector in Indonesia, including its backward and forward linkages with other economic sectors. The tourism sector is represented by the hotel and restaurant (hospitality) industry. The study uses the input-output method and traces the econometric backward and forward shocks of the tourism sector with the Error Correction Model (ECM), using database from Statistics Indonesia from 2010 to 2019. The paper contributes to the existing literature by using multi-stage quantitative processes to observe backward and forward economic linkages. The result shows that manufacturing output contributes a significant and positive effect to the hotel and restaurant industry. At the same time, the tourism sector provides a significant and positive contribution to government retribution. Nonetheless, there is a negative relationship between the growth of the agriculture and tourism sector, which is assumed due to the tradeoff in the factor of production between the agricultural and tourism sector development. Consequently, backward and forward relationships suggest more holistic and prudent economic policies for observing interdependent tourism development in Indonesia's other economic sectors.
Original languageEnglish
Pages (from-to)73 - 90
Number of pages18
JournalJurnal Ekonomi Bisnis dan Kewirausahaan
Issue number1
Publication statusPublished - 2021
Externally publishedYes

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 502027 Political economy

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