Economic Policy Implications of LQ and DLQ Analysis in Strategic National Project Area
Keywords:
Location Quotient (LQ), Dynamic Location Quotient (DLQ), Economic Policy, Strategic National Project, Tanimbar Islands
Abstract
This study examines the economic policy implications of the Location Quotient (LQ) and Dynamic Location Quotient (DLQ) analyses in the context of the Tanimbar Islands, located in Indonesia’s Maluku province. The islands, rich in natural resources, face significant development challenges, including poor infrastructure, geographic isolation, and limited industrialization. The upcoming INPEX project, a large-scale energy initiative by a Japanese corporation, is expected to transform the region’s economy through investments, job creation, and infrastructure development. The aim of this research is to analyze which sectors—using LQ and DLQ—show the most promise for growth in light of the INPEX project, and to propose local economic policy adjustments that can maximize these opportunities. The study finds that while the primary sectors, such as agriculture and fisheries, have potential, underdeveloped infrastructure and outdated practices hinder their growth. Strategic planning, informed by LQ and DLQ analyses, is critical to aligning the region’s economic development with the upcoming industrial transformations.Downloads
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References
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Chinitz, B. (1961). Dynamic location quotient analysis: An approach to industrial diversification. Journal of Regional Science, 1(1), 40-56.
Devi, N. K. T. N., & others. (2024). Economic potential and infrastructure development in the Tanimbar Islands. Journal of Development Economics, 15(2), 115-132.
Hutapea, A., Koleangan, R. A., & Rorong, P. S. (2020). The role of economic sectors in regional development: Case study of the Tanimbar Islands. Economic Journal of Indonesia, 12(3), 45-59.
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Porter, M. E. (1990). The competitive advantage of nations. Free Press. Sen, A. (1999). Development as freedom. Oxford University Press.
Stiglitz, J. E. (2012). The price of inequality: How today’s divided society endangers our future. W.W. Norton & Company.
Todaro, M. P., & Smith, S. C. (2020). Economic development (13th ed.). Pearson Education.
Chandra, S., & Sharma, R. K. (2007). Research Methodology.
Creswell, J. W. (2014). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches (4th ed.). SAGE Publications.
Esteban-Marquillas, J. M. (1972). A Reinterpretation of Shift-Share Analysis. Regional and Urban Economics, 2(3), 249-255. https://doi.org/10.1016/0034-3331(72)90025-
4
Isserman, A. M. (1977). The Location Quotient Approach for Estimating Regional Economic Impacts. Journal of the American Institute of Planners, 43(1), 33-41. https://doi.org/10.1080/01944367708977710
Johnston, M. P. (2014). Secondary Data Analysis: A Method of which the Time Has Come.
Qualitative and Quantitative Methods in Libraries, 3(3), 619-626.
Crescenzi, R., & Rodríguez-Pose, A. (2012). Analyzing the economic performance of European regions: The role of innovation and the regional dimension of the knowledge economy. Journal of Economic Geography, 12(5), 873-905. https://doi.org/10.1093/jeg/lbq050
Croes, R. R. (2017). The economics of tourism and regional development. Springer.
Gunningham, N. (2014). The resources of the earth: The politics of mining in the 21st century. Oxford University Press.
Henderson, J. V., & Noonan, D. S. (2020). The economics of location and growth.
Cambridge University Press.
Kustiwi, I.A. 2024. “Accounting Information System (AIS): Integration of Artificial Intelligence and Management in Farm Tourism Kelompok Tani Elok Mekar Sari.” DiE: Jurnal Ilmu Ekonomi Dan Manajemen 15(1):123–31. doi: 10.30996/die.v15i1.10634.
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Martin, R., & Sunley, P. (2015). The economic geography of innovation. In J. Fagerberg,
D. C. Mowery, & R. R. Nelson (Eds.), The Oxford Handbook of Innovation (pp. 159-183). Oxford University Press.
Pahl-Wostl, C., et al. (2013). Sustainability and water management: Resilience in practice.
Water Resources Management, 27(6), 1805-1818. https://doi.org/10.1007/s11269-
013-0329-9
Porter, M. E. (1990). The competitive advantage of nations. Free Press.
Ricardo, D. (1817). On the principles of political economy and taxation. John Murray. Stern, N. (2007). The economics of climate change: The Stern review. Cambridge
University Press.
Published
2025-05-23
Section
Articles
Copyright (c) 2025 Rendy Oratmangun, Ferly. A. Sairmaly, Leny. S. Anggraini
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