Agglomeration of Food and Beverage Industries in Regencies and Cities in East Java Province

Abstract

The focus of this dissertation will discuss about the food and beverage industries as the object of research due to the three main reasons, namely:  1)  The high contribution (share) of food and beverage industries is setting up Gross Regional Domestic Product (GRDP) of East Java; 2) The phenomena of agglomeration of food and beverage industries in East Java Province and their influencing factors observed from the view point of agglomeration theory;  3) The policy of MP3EI – Master Plan on Economic Acceleration, Enlargement and Development. This MP3EI instructs the East Java Province as the Motivating Corridor for National Industries and Services focusing on development of economic activity in food and beverage industries. (MP3EI Document, Coordinating Minister for Economic Affairs of The Republic of Indonesia, 2011:47), so that East Java Province may not ignore in developing the of food and beverage industries.Based on the empirical phenomena and the theoretical review applied, the goals of this research are as follows: 1) To do the mapping on the ‘excellent’ food and beverage industries in Regencies / Cities in East Java; 2) To measure the agglomeration indexes in each regency / city. 3) To calculate and to analyze the influence of manpower wage variables, the export, outputs and index of the regional competing power to the agglomeration of food and beverage industries. 4)  To analyze the correlation among the regions of food and beverage industries. The analytical tools applied in this research are: LQ Analysis, Balassa index,  Ordinary Least Square (OLS) Analysis, and Moran Index Analysis.The outputs of agglomeration analysis indicate: 1) The biggest agglomeration indexes in the year 2012 were as follows: Regency of Situbondo (4.05) and Regency of Trenggalek (2.03) in which those two regions are based on natural resources. 2) Agglomeration of food and beverage industries in regencies / cities undergo the shift, in which in the year 2000 the regions experiencing the agglomeration such as Bangkalan, Sampang, Pamekasan, Sumenep, Lamongan, Jombang, Nganjuk, Madiun, and Pacitan; but in the year 2012 those regions do not undergo any agglomeration (non-agglomerated). Output of analysis on factors motivating the occurrence of agglomeration are variables of manpower wages, export and index of positive significant  competing power  causing the increase in concentration of temporary industrial regions (agglomeration), meanwhile the outputs of food and beverage industries do not influence the occurrence of agglomeration of food and beverage industries in regencies / cities in East Java.Outputs of analysis on correlation among regions by using Moran’s Index in perspective of manpower amount working in food and beverage industries that in the year 2010 (0.256) and in 2012 (0.151) indicate the positive index in the occurrence of autocorrelation, but its correlation is weak. Such condition shows that the manpower in food and beverage industries in regencies / cities in East Java is not inter-regionally influenced at the place where such manpower is available (independent).

Keywords: Food and Beverage Industries, Agglomeration, Moran’s index.