Impact of Exchange Rate Volatility to Stocks’ Return in Indonesia: The Augmented Markov-Switching Egarch Approach

The stock price is one indicator that represents the economic performance in a country. Changes in stock prices, including various factors, as an example, is the exchange rate changes as the representation from the foreign exchange market. The fluctuating exchange rate price also influences the volatility of the stock price. Furthermore, volatility has different high and low regime stages that will cause a disparate impact on the outcome of the relationship changes. This study aims to examine the presence of asymmetric volatility and its effects on the volatility of LQ45 stock returns, as well as the changes in exchange rates of Rupiah against USD from 1997 to 2017. Using the Augmented Markov Switching EGARCH approach, the results of this study indicate an asymmetric behavior in the volatility of LQ45 stock returns. High volatility regimes are more dependent and more unstable than low volatility regimes, and low volatility regimes dominate the duration compared to the high volatility regime. The good and bad news give different impact on LQ45 stock return volatility and exchange rate changes. Moreover, the unstable economies will respond faster than the stable economies in terms of facing the exchange rate changes.

Measuring Farmers Risk Aversion in Facing Climate Change in Bengawan Solo Watershed

This research aims to understand the effect of risk aversion on the farmers’ willingness to pay (WTP) to mitigate on climate change and identify the relationship between climate change and agriculture sectors’ growth at Bengawan Solo Sub-Watershed in Upper Area. We use primary data obtained through interviews with 104 respondents, who are farmers from Sribit Village in Sragen Regency. The sampling techniques are purposive non-probability sampling. The data analysis using contingent valuation methods (CVM) and Multiple Linear Log Regression. Meanwhile, the secondary data obtained from The Central Bureau of Statistics (BPS), World Bank, and Germanwatch is collected to identify the effect of climate change on the agricultural sector. This research result shows that risk aversion does not affect farmers’ WTP to do adaptation. The variable of land area, education, and input cost affect significantly (5%), while working experience also affect to WTP at 10% significance level. The implication of low-risk aversion implies farmers not aware of climate change. Risk reduction efforts will not be a priority for farmers because the advantages to adaptation is not worthy. The relationship between production levels and negative climate change scores confirms that climate change can reduce farmer production.

Joint Determinants of Monetary, Macroeconomic, Social and Income Inequality

This study discusses all the potential relationships between monetary, macroeconomic, social and income inequality in an integrated manner by making Indonesia a concrete case study. This empirical study discussed the relationship based on theoretical modelling and carried out through appropriate estimators applied to the data of 33 provinces in Indonesia. To achieve this objective, the simultaneous model of seemingly unrelated regressions (SUR) was used. The results concluded that there are variables that jointly determined the monetary, macroeconomic and social also income inequality. Like, consumption can increase inflation and macroeconomic while at the same time can reduce population growth and human development, and increases income inequality. Savings which determine credit also pushes macroeconomics while simultaneously increasing population growth, and it can reduce income inequality. Minimum wages can reduce inflation and encourage production growth, while increases human development and reduces population growth also can reduce income inequality. Unemployment can also reduce inflation and increase economic growth, at the same time reduces population growth and human development while increases income inequality. Education and health encourages economic growth and the level of human development then can reduce income inequality.

Linkages between Dynamic Financial Inclusion and Institutions in ASEAN 8

Financial inclusion becomes a priority concern with governments in ASEAN countries such as reduce the lack of access for public to formal financial institutions. Moreover, there is an empirical gap of linkages between institutions and financial inclusion. Thus, the study aims to estimate the effect of institutions on dynamic financial inclusion. Three financial inclusion indicators are employed, namely: debit card ownership, credit card ownership, and domestic credit to GDP ratio. Institutional indicators consist of six indicators following world governance indicators. The research observations are about 88 consisting of cross-sections were eight of ASEAN countries and the time series was 2008-2018. Indeed, a dynamic panel data was employed. In general, the findings exhibit that FEM is the appropriate model under Hausman test. Specifically, debit card ownership and credit card ownership were determined by voice and accountability, and rule of law while domestic credit to GDP ratio was determined by some indicators of institutions such as voice and accountability, political stability, regulatory quality, and control of corruption. Hence, the policy implications were directed to improve the quality of institutions both country and ASEAN levels. The high quality of institutions will stimulate the acceleration and expansion of financial inclusion in ASEAN countries.

The Determinants of Level of Society Welfare Within Fiscal Decentralization Framework In Regional Autonomy Era

The purpose of this study is to prove to what extent the influence that fiscal decentralization, local financial performance, local government expenditure, Locally Generated Recurring Revenues or Pendapatan Asli Daerah (PAD), Profit-Sharing Fund or Dana Bagi Hasil (DBH), General Allocation Fund or Dana Alokasi Umum (DAU), and Special Allocation Fund or Dana Alokasi Khusus (DAK) have on the level of society welfare. The objects of this research are Regencies and Municipalities in Java Island. The data used in this study are the secondary. The data on balance sheet and realization report of the regional revenues and expenditure budget (APBD) are from the Ministry of Finance of the Republic of Indonesia. The data on the level of society welfare that is proxyed by the value of HDI is obtained from Bappenas and BPS of Central Java. This research uses time series data from 2012-2014 periods. The research method used is the research of causality with linear regression model. The result of the significance test shows that only one DAK variable can partially affect the HDI variable. Meanwhile those variables other than DAK partially or individually do not influence the HDI variable. The result of regression analysis shows that simultaneously such variables as Fiscal Decentralization, Regional Finance Performance, Local Government Expenditure, PAD, DAU, DAK and DBH have an influence on HDI in Regencies / Municipalities in Java Island.

Linkages between Economic Growth, Poverty and Environmental Quality in Indonesia

The biggest obstacle to sustainable development in Indonesia is due to social-environmental factors. The objective of this study is to identify lever variables in the intended socio-environmental factors through dimensional analysis in sustainable development. By using the path analysis methods and secondary data on economic growth, the number of poor people and an index of environmental quality in Indonesia, 2016, it can be proven that poverty has a direct negative effect on environmental quality. This makes it possible to occur in the rural poverty typology because their needs for life depend on natural resources. Therefore, poverty reduction policies should be prioritized in reducing the number of poor people in rural areas.

Tobacco Farmer’s Willingness to Pay for Green Tobacco Sickness Risk Mitigation

Tobacco farmers are at risk for disease due to work directly related to pesticide exposure and the absorption of wet leaf tobacco nicotine that is Green Tobacco Sickness (GTS). This study aimed to determine the value of Willingness to Pay (WTP) of tobacco farmers in the Jember Regency for health insurance because they are at risk of exposure to GTS disease. The method used in this research is a contingent valuation method (CVM). The sample of 394 respondents have interviewed. By binary logistic regression, it is showed that 64% of respondents are willing to pay health insurance, income, education level, and green tobacco sickness significantly influence the WTP, while age variable, family, and periods of work has no effect on WTP. The results of this study are expected to provide input to policy makers in the framework of providing health insurance for tobacco farmers of many regions in Indonesia.

Does Women’s Reproductive Health and Empowerment Affect Female Labor Participation in ASEAN?

This research aims to analyze the effect of women’s reproductive health and women’s empowerment on female labor force participation (FLFP) in ASEAN countries. This type of research is quantitative research with panel data types from 9 (nine) ASEAN countries during the period 2010-2017. The resultsshow that countries with high levels of women’s reproductive health and women’s empowerment also have high levels of female labor participation.

The Role of Entrepreneurship Development for Women Welfare in Rural Area

Data from statistics Indonesia in 2017 indicates that entrepreneurship in Indonesia reaches 3.01% of the population, which is 225 million people. That number increased dramatically from 2014 which only amounted to 1.55%. Increasing the number of women entrepreneurs is still largely urbanized, whereas from rural communities the number is still limited. Women are expected to have the ability to develop their potential and improve the welfare of women in rural areas. Using Schumpeter’s theory which is then supported by hope theory explains why entrepreneurship is important for some women. The approach used in this research is to use a qualitative approach. The procedure in collecting data through the study of literature, namely in the form of activities to collect, review, and examine and search for documents or literature that can provide information needed in a research activity. This article investigates how and what rural women need to become entrepreneurs. Women in rural areas are more likely to be less involved in entrepreneurial activities and are less optimistic about the ability to engage in entrepreneurship education and the lack of confidence to start as an entrepreneur. Because in Schumpeter’s theory the most important factor that causes economic development is the process of innovation and the culprit, namely entrepreneurs. Community economic progress can only be applied with innovation by entrepreneurs. Whereas in the theory of hope, it is based on the interests of individuals who want to achieve maximum satisfaction and want to minimize dissatisfaction.

Distribution Channel Patterns and The Actors Welfare of Marine Fishery Supply Chain in Arjasa, Kangayan and Sapeken in Kangean Islands

The actors’ welfare of marine fishery supply chain in the three sub-districts in Kangean Islands, namely Sapeken, Arjasa and Kangayan, are different even though they access to the same marine fisheries resources. The marine fisheries in Sapeken are more prosperous than those in Arjasa and Kangayan. This study aimed at identifying the distribution channel patterns of marine fishery products supply chain in Kangean Islands which providing an explanation of the actors’ welfare differences. In-depth interviews with various actors were conducted to formulate the distribution channel patterns of marine fishery products. Quantitative survey data of 102 respondents from marine fisheries were processed descriptively to determine the actors’ welfare. Research showed that the distribution channel patterns in Arjasa and Kangayan vary but are limited in the local market and the islands communities as the final consumers. It causes the low products prices. Meanwhile, the distribution pattern in the Sapeken is able to penetrate markets outside the Kangean Islands with high product prices. Therefore, it is not surprising if the actors’ welfare in Arjasa and Kangayan sub districts are lower than the actors’ welfare in Sapeken.