DEINDUSTRIALIZATION AMONG ASEAN COUNTRIES AND RELATED AFFECTING FACTORS

• Main Authors: Sari N.A., Syahruddin
• Format: Article
• Language: English
• Published: Russian Journal of Agricultural and Socio-Economic Sciences 2019-08-01
• Series: Russian Journal of Agricultural and Socio-Economic Sciences
• Subjects: Deindustrialization; manufacturing; population; economic openness; income per capita
• Online Access: https://rjoas.com/issue-2019-08/article_19.pdf

This study aims to identify the causes of deindustrialization among ASEAN countries with years of analysis from 2000 to 2017. Secondary data in this study were obtained from CEIC and the analysis method used an econometric model approach to panel data. The variable used to describe deindustrialization in this study (dependent variable) is manufacturing value added (MANVASUR) and the share of manufacturing in GDP (MANSHA). The results of the analysis show that per capita income, population, and economic openness have a significant effect on manufacturing value added (MANVASUR), while the share of manufacturing in GDP (MANSHA) is influenced by the wealth of natural resources, population, and economic openness. The population and per capita income of ASEAN member countries are positively related to the added value of the industrial sector, while economic openness is negatively related. This means that the more open the economy of a country, on the contrary the value added of the industrial sector actually decreases. Economic openness and natural resource wealth of ASEAN countries are positively related to the contribution (share) of the industrial sector to GDP, while the population is negatively marked by contribution (share) industrial sector to GDP. That means, the fewer the population, the less human resources involved in industry and industry will involve a lot of technology (capital intensive).