Structural Change in Regional Economies: Empirical Evidence from Aceh, Indonesia

Abstract

Aceh is a western province of Indonesia, located on the Sumatera Island. This study aims to describe economic conditions in the Aceh Province. The economic phenomenon is described using the Esteban-Marquilas modified shift-share analysis. The results show that most of the economic sectors in Aceh Province do not have a competitive advantage but still specialize compared to the same sector at the national level. Nevertheless, there are still two sectors that have a competitive advantage and specialize, namely the water supply, sewerage, waste management and remediation activities sectors; and accommodation and food service activities sector. This is due to the decrease in the contribution of primary and secondary sectors in the formation of gross regional domestic product in Aceh. Earlier Aceh’s economy depended on the primary sector. This indicates a structural change in the economy.

Keywords: Allocation Effect, Competitive Advantage, Regional Development., Shift-Share Analysis, Structural Change

Article Review Status: Published

Pages: 21-30 (Download PDF)

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