Leading sectors, multiplier effects, and economic spillovers among the islands of East Nusa Tenggara Province

Werenfridus Taena; Anggelina Delviana Klau; Marce Sherly Kase; Fried Markus Alung Blegur; Felisisima Afoan; Febrya Christin Putri Handayani Buan

doi:10.22437/ppd.v13i4.41468

Authors

Werenfridus Taena Agribusiness Study Program, Faculty of Agriculture, Universitas Timor, Indonesia
Anggelina Delviana Klau Development Economics Study Program, Faculty of Economics and Business, Universitas Timor, Indonesia
Marce Sherly Kase Development Economics Study Program, Faculty of Economics and Business, Universitas Timor, Indonesia
Fried Markus Alung Blegur Mathematics Study Program, Faculty of Agriculture, Science, and Health, Universitas Timor, Indonesia
Felisisima Afoan Management Study Program, Faculty of Economics and Business, Universitas Timor, Indonesia
Febrya Christin Putri Handayani Buan Mathematics Study Program, Faculty of Agriculture, Science, and Health, Universitas Timor, Indonesia

DOI:

https://doi.org/10.22437/ppd.v13i4.41468

Keywords:

Input–Output analysis, Leading sectors, Multiplier effects, Spillover effects, Regional economy

Abstract

Regional economic disparities and fragmented inter-island linkages remain key challenges in East Nusa Tenggara (NTT), one of Indonesia’s archipelagic provinces with diverse resource endowments. This study analyzes the structure and dynamics of NTT’s regional economy by identifying its leading sectors through intersectoral linkage analysis, estimating the magnitudes of multiplier effects, and examining spillover effects across the province’s major islands. The research utilizes the 2016 Input–Output Table of NTT Province and the accumulated Gross Regional Domestic Product (GRDP) data of regencies and cities across the Timor, Flores, and Sumba islands for the 2016–2023 period. Analytical methods include linkage analysis, multiplier effect estimation, and the Vector Error Correction Model (VECM). The results show that agriculture, manufacturing, electricity, trade, and transportation constitute the leading sectors due to their strong forward and backward linkages. At the same time, agriculture and manufacturing also generate the largest multiplier effects. These sectors further create significant inter-island spillover effects, characterized by spread effects between Sumba–Timor, Sumba–Flores, and Timor–Sumba, and backwash effects between Timor–Flores and Flores–Sumba. The findings highlight that strengthening productive linkages in agriculture and manufacturing is vital for enhancing spatial equity and promoting inclusive regional growth. Conceptually, this study contributes to the literature by integrating intersectoral, multiplier, and spillover analyses to explain spatial economic interdependence in archipelagic regions and by offering practical policy implications for fostering sustainable inter-island integration in NTT Province.

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