An Analysis of the Trade Sector in East Java : The Role of Government, Manufacturing Industry, Consumer Prices, and Consumer Capacity.

Analisis Sektor Perdagangan di Jawa Timur: Peran Pemerintah, Industri Manufaktur, Harga Konsumen, dan Daya Beli Konsumen.

Abstract

Gross Regional Domestic Product (GRDP) is a primary indicator reflecting the total value of goods and services produced within a region over a specific period. Empirical studies that specifically examine GRDP in the trade sector as a measure of regional output are essential, as they contribute to understanding and promoting regional economic growth, particularly through trade activities. East Java Province is recognized as a gateway for trade activities with other regions such as DKI Jakarta, West Java, and Central Java. Moreover, East Java has positioned itself as the entry point to Eastern Indonesia, facilitating trade with areas in Kalimantan and Sulawesi. This study identifies several key determinants of trade: food assistance budget, infrastructure, manufacturing industry, and consumer capacity. Among these, the most influential factor in determining GRDP is consumer income capacity, particularly the net monthly wage of formal workers, which accounts for 2.56% of the variance in GRDP. Interestingly, the net monthly income of informal workers does not have a significant effect on GRDP. Another notable influence comes from the average consumer price of rice, which has a negative contribution of 1.27%. Infrastructure, the presence of manufacturing industries, and the food assistance budget also exert a positive influence on GRDP. Overall, the independent variables in this study explain 68.6% of the variation in GRDP in the wholesale and retail trade, and the repair of motor vehicles and motorcycles sectors.