Indonesia Economic Policy in The Changing World

INDONESIA ECONOMIC POLICY IN THE
CHANGING WORLD
Proceedings of the
2nd International Conference on Economic Development
9 Oktober 2017
Grand Labersa Hotel Pekanbaru
Organized and Hosted by
Development of Economics,
Faculty of Economics, Riau University, Pekanbaru
JURUSAN ILMU EKONOMI

FAKULTAS EKONOMI UNIVERSITAS RIAU
PEKANBARU
2017
INDONESIA ECONOMIC POLICY IN THE CHANGING WORLD
Proceedings of the
2nd International Conference on Economic Development
9 October 2017
Grand Labersa Hotel Pekanbaru
Authors:
A A I N Marhaeni, Ahmad Fauzan Fathoni, Ahmad Mardalis, Alpon Satrianto, Andika Satya,
Ando Fahda Aulia, Anthony Mayes, Any Widayatsari, B. Isyandi, Dahlan Tampubolon,
Darmayuda, Dewi Ismoyowati, Eka Armas Pailis, Eka Dewi Anggraini, Emrinaldi Nur DP, Evy
Maharani, Fatkhurahman, Hery Sulistio, Julita, Ni Nyoman Reni, Nirwan Maulana, Nurul
Istiqomah, Raden Lestari Garnasih, Raden Yudi Prawira Anjaya, Rahmita Budiartiningsih, Rita
Yani Iyan, Riwi Sumantyo, Rosmida, Rusli, Siti Aisyah Tri Rahayu, Supriyono, Tri Oldy Rotinsulu,
Zirman
Reviewers:
Ando Fahda Aulia
Nobel Aqualdo
Editors :
Dahlan Tampubolon
Any Widyatsari
Ando Fahda Aulia
Nobel Aqualdo
Published by:
Jurusan Ilmu Ekonomi, Fakultas Ekonomi
Universitas Riau, Pekanbaru
Kampus Binawidya Km 12,5 Pekanbaru, 28293
Tlp: (0761) 63268, 47324
Email: ekonomi.pembangunan@unri.ac.id
Organized and Hosted by :

Development of Economics, Faculty of Economics Riau University, Pekanbaru
Co-organized by :
Alliance of Indonesia Economic Development Study Program (APSEPI)
ISBN: 978-602-18512-1-0
Disclaimer
The publisher accept no responsibility for any statement made or opinion expressed in this publication.
Consequently, the publishers and copyright holder will not be liable for any loss or damage sustained by any
reader as a result of his or her action upon any statement or opinion in this work
FOREWORD
The 2nd International Conference on Economic Development: Indonesia Economic Policy in

the Changing World is a forum for discussion and debate of important policy issues facing
developing countries. The conference emphasize the contribution that relevant policy,
empirical, and basic economic research can make to understanding development process
and to formulating sound development policies. Conference abstracts and papers are
written by researchers in and outside Indonesia. The conference series was started in 2016.
The abstracts and papers of International Conference on Economic Development are

published as a proceeding since 2017. The proceedings contain scientific abstracts and
papers representing not only the science of economics in the diversity of its sub-branches,
but also other social sciences (sociology, political science), thus confirming interdisciplinary
development of the contemporary social science.
The Editorial Boards of the Review do not review the proceeding, nor are the abstracts and
papers selected from the conference and published here subject to the peer review process
through which regular submissions to these proceeeding must pass.
The Conference Committee and Editorial Board are open to comments and
recommendations concerning the preparation of future conference proceedings and
organisation of the conference.
On behalf of the conference organisers

Dr. Any Widyatsari
Senior Lecturer of Faculty of Economics and Bussiness
Riau University
ii
CONTENTS
The 2nd International Conference on Economic Development: Indonesia
Economic Policy in the Changing World
Conference Proceedings
The Factors That Influencing Learning Achievements In Introduction Accounting 1

Course
Rosmida and Suharyono
Bengkalis State of Politechnic
Sadies (Sawit Candies): Innovation Of Palm Sugar Candy To Reduce Palm Re-Planting 11
Waste As A Solution Of Community Empowerment West Maredan Village Tualang
Sub-District Siak Regency
Andika Satya, Budi Setiawan, and Ilham Fadhilah Perdana
Riau University
Analysis of Business Efficiency of Agro-based Small and Medium Enterprises (SMEs) 16

in Kuok District, Kampar Regency of Riau Province
Evy Maharani and Yeni Kusumawaty
Riau University
Effects of Political Closeness And Capital Expenditure On Regional Economic Growth: 27

(Empirical Studies at Regency and City Governments in Indonesia)
Raden Yudi Prawira Anjaya, Hefrizal Handra, Elfindri, and Efa Yonnedi
Andalas University
The Effect of Corporate Governance On Tax Avoidance (Empirical Studies On 38

Manufacture Companies Listed On Indonesian Stock Exchange In 2012-2015)
Rusli, Julita and Mudrika Alamsyah Hasan
Riau University
Signaling of Private Information On Election 39

Eka Dewi Anggraini
University of Bengkulu
The Analysis of Preparedness of Coastal Fishing Industry In Adopting Biological 40

Assets Approach For Financial Reporting System
Emrinaldi Nur DP
Riau University
Determinant Factors That Influence The Demand of Social Health Insurance In 41

Surakarta on 2017
Nurul Istiqomah and Anggia Desty Rahmasari
Sebelas Maret University
Research Culture and Research Productivity 42

Raden Lestari Garnasih
Riau University
Assessing The Potential Impact of The Rural Act Implementation On Indonesian 43

Economy: Financial – SAM Approach
Nirwan Maulana and Heriyaldi
Padjadjaran University
iii
The Effects of Corporate Social Responsibility, Good Corporate Governance And 44
Investment Opportunity Set On Firm Performance and Cost of Debt
Ahmad Fauzan Fathoni
Riau University
Analysis of Factors Affect The Quality of Bengkalis Regency Government Financial 45

Statements
Julita and Susilatri
Riau University
Analysis of Syari’ah Financing In Indonesia 46

Siti Aisyah Tri Rahayu, Tri Mulyaningsih, and Malik Cahyadin
Fisherman Empowering Model In One Stop Bahari Tourism In The Beach of Klayar 47
And Tamperan Beach District of Pacitan
Dewi Ismoyowati ,Nurul Istiqomah, and Izza Mafruhah
Leading Sectors Analysis of Riau Province After Decreasing Crude Oil Price Based On 48
PDRB (Gross Domestic Regional Product) SNA 2008
Anthony Mayes
Riau University
Study of Rural Household Savings Behaviour In North Sulawesi : A Path Analysis 49

Approach
Tri Oldy Rotinsulu, George M.V. Kawung, and Krest Donald Tolosang
Sam Ratulangi University
The Index of Human Development On Poverty In Riau Province 2010-2015 Based On 50

Gender Conception
Rahmita Budiartiningsih, Diniati, and Lapeti Sari
Riau University
Evaluation Model Minimum Service Standards Pacitan Public School In Providing 51

Public Sector Service To The Society In The Region Pacitan, East Java
Riwi Sumantyo, Tetuko Rawidyo Putro, and Johadi
Analysis of Provincial Fiscal Capacity On Mandatory Affairs In Efforts To Increase 52

Regional Competitiveness And Economic Growth In Riau Province
B. Isyandi
Riau University
Productivity effect of orange farming to farmers’s income in Kampar Regency 53

Rita Yani Iyan, Any Widayatsari, and Sally Oki Mahyona
Riau University
Implementation of CIPPO Model (Context, Input, Process, Output, And Outcome) In 54

Poverty Reduction Efforts Based On Main Potential In Wonogiri Regency
Supriyono, Izza Mafruhah, and Nurul Istiqomah
Several Variables Correlating To Economic Conditions Of The Poor Population in Bali 55

Province
A A I N Marhaeni and Ni Nyoman Yuliarmi
University of Udayana
iv
Analysis of The Effect of Human Development To Economic Growth In Riau Province 56
Any Widayatsari, John Viter, and Syapsan
Riau University
The Effectiveness of Fiscal And Monetary Policy On Output and Price In Indonesia 57
Alpon Satrianto, Syafruddin Karimi, Indrawari, and Werry Darta Taifur
State University of Padang and Andalas University
Deindustrialization Phenomenon In Riau Province and Sumatera 58

Darmayuda, M. Hasnan, Hera Lusiana, Neti Marika, and Prayudi Ibrahim Nasution
Riau University
The Role of Higher Education In Producing Young Enterprises 59

Ahmad Mardalis, Fauzan, and Imron Rosyadi
University of Muhammadiyah Surakarta
Does Social Orientation Microfinances (Mfi’s) Fit For Subsistence Micro and Small 60
Enterprises? A Case Study Social Capital Based Mfis In Surakarta
Hery Sulistio Jati Nugroho Sriwiyanto, and Akhmad Daerobi
An Analysis of Compliance Taxpayers Restaurant As The Potential Local Revenue 61

Zirman, Nur Azlina, and Restu Agusti
Riau University
Optimization of Zakat Fund In BAZNAS Pekanbaru 62

Eka Armas Pailis
Riau University
Bad and Good News: Hoax Asessment Model For Startup Innovation 63
Fatkhurahman
University of Lancang Kuning
Supply Chain And Marketing of Post-Production Rice In Bali Province 64

Ni Nyoman Reni Suasih and Ni Nyoman Yuliarmi
University of Udayana
Quantifying The Loss of Economic Value In Acute Respiratory Infections (Ari) Due To 65
Haze In Forest and Land Fires In Pekanbaru, Riau
Ando Fahda Aulia, Petri Busmi Elda, and Tri Sukirno Putro
Riau University
Politic Economic Power of the Penghulu Kampong and Implications On the Local 66
Democratic Consolidation Strategy: The Case of Two Villages
Dahlan Tampubolon, Khairul Anwar and Syofian Hadi
Riau University
v
THE FACTORS THAT INFLUENCING LEARNING ACHIEVEMENTS IN
INTRODUCTION ACCOUNTING COURSE
(Empirical Study to Students of Department of Business Administration,
Informatics Engineering and Business English at State Polytechnic of
Bengkalis)
Rosmida and Suharyono

Politeknik Negeri Bengkalis
Email: rosmida@polbeng.ac.id, suharyono@polbeng.ac.id
Abstract: This study is expected to provide an overview of the factors that

affect student achievement in studying accounting introduction. The purpose
of this study is to conduct an empirical investigation whether the internal
factor variables, external factors, and the quality of teaching affect the
variable of student achievement. The total populations in this study were 138
respondents. The data were collected through questionnaires. Data analysis
was done by multiple regression using SPSS version 22. The result showed
that internal factor and teaching quality had an effect on student's learning
achievement, while external factor had no influence to the quality of student
learning.
Keywords: Internal, external, quality, teaching, achievement.
I. INTRODUCTION
Accounting is an art. This phrase is familiar to students, academics and
accounting practitioners. According to Suwardjono (2014: 2) art is the skill of
doing things that require feelings, experiences, talents and considerations.
Learning achievement is the main benchmark to know the success of
student learning. Students with high achievement can be said that he has
succeeded in learning. Learning achievement is the level of student knowledge of
the material received.
The fact is the majority of the students who take accounting introductory
courses in the research class, have difficulty understanding the material being
taught. Table 1.1 presents the data of introductory odd semester level accounting
courses 2015/2016.
Table 1. Recap Course Value Introductory Accounting Odd Semester
2015/2016
Study Program
No Description Busines English Informatics Total %
Administration
1 Pass 62 8 12 82 50,9%
2 Fail 41 19 19 79 49,1%
Total of Students 103 27 31 161 100%
Source: lecturer proficiency course report
Based on table 1.1 the final assessment of student achievement for
introductory accounting courses in Business Administration Studies Program
showed 62 people successfully passed, while 41 others failed. For Business English
Indonesia Economic Policy In The Changing World 1
Proceedings of the 2nd International Conference on Economic Development
2 Rosmida & Suharyono
Study Program shows only 8 people who successfully passed, while 19 others
failed. For Informatics Engineering Study Program shows only 12 students who
successfully passed, while 19 others failed.
Table 1.1 shows that on average 49.1% of students fail to understand and
absorb accounting introductory material, whereas only 50.9% of students are able
to understand the introductory material of accounting. This figure indicates that
the introductory course of accounting is a difficult course for the students of State
Polytechnic of Bengkalis.
Polytechnics in the process of teaching and learning using a package
system, ie students taking all subjects are programmed to pass every semester
according to applicable regulations, students who do not pass or get a low score is
required to repeat the exam course introduction accounting. This becomes a
dilemma for lecturers in the Polytechnic. Students are encouraged to be
pessimistic and there is no motivation to study hard. Although not understand the
material of introduction of accounting will still be graduated. This phenomenon
can lead to hypotheses that must be proven about what are the factors that affect
students in studying introductory courses of accounting in Business
Administration Studies Program, Business English and Informatics Engineering
State Polytechnic Bengkalis.
According to the comments of the lecturers who handled the introductory
accounting courses, many students experienced failure and received low academic
achievement in this course. The variation in introductory accounting values is
influenced by the heterogeneity of students with different backgrounds of science
when in high school / vocational schools such as science, social, TKJ and others.
This study examines the factors that affect the learning achievement of
accounting introductory courses in students of Business Administration Study
Program, Business English and Informatics Engineering. This research is
important, to find out how to improve student achievement, that is by looking for
factors that have influence on learning achievement first.
II. REVIEW OF LITERATURE

Theoretical Framework
Learning achievement is the result of student achievement in the field of
knowledge and competence on the material given by the lecturer. There are many
factors that influence student achievement. These factors are classified into
internal factors, ie factors that come from within the student, external factors are
factors that come from outside the student self and the quality of teaching is the
quality of teachers and learning facilities are available.
High interest and attention to the subject will have a good impact on
student achievement. Accounting learning experience gained by students before
being at college level have a significant effect on student achievement. This is in
line with Uyar and Gungormus (2011), Al-Twaijry (2010) and Byrne and Flood
(2008). But in research Lestari and Suparlinah (2010) accounting learning
experience does not affect student achievement.
The Factors That Influencing Learning Achievements 3
Learning motivation is the overall driving force in the student itself which
creates learning activities and gives direction to learning activities, so that the
objectives desired by the subject can be achieved. Students who are motivated
without motivation will tend to be ready and diligent in learning tasks because
they feel it needs and wants to achieve the real learning goals.
Family environment is the first environment that has a strong influence on
individuals compared to the secondary environment whose bonds are rather loose.
Things in the family, the way educating parents, the home atmosphere, the family
economic situation, the parents 'attention, and the relationships among family
members are supposed to have an influence on students' learning achievement.
Uwaifo (2008) shows that there is a significant influence between the family
environment and student learning achievement.
The quality of teaching is the quality of teachers and facilities in the
teaching and learning process. School as one of the educational factors that are
very influential on the formation of fikir patterns, attitudes, personality, student
behavior because it will also provide color in the form of student identity in the
future. Research Lestari and Suparlinah (2010) and Beke (2008), mention that the
quality of teaching affect the professional orientation. The better the mastery of
lecturers in using methods, media approach, and the principles of teaching, the
higher the orientation of professionalism of lecturers that have a positive effect on
student learning outcomes.
Research Adjani (2013) shows that there is a positive influence between
interest and motivation to learn accounting with learning achievement in the
course of introduction accounting. If students are interested in a particular lesson
they tend to pay attention to them well and have a good impact on student
achievement. Family environment has no effect on student achievement in
Introduction to Accounting courses.
Novius's research (2012) shows an internal factor with significant value
0,862> 0,05 and external factor with significant value 0,317> 0,05 does not affect
student achievement of student of Accounting Department Faculty of Economics
and Social Sciences UIN SUSKA RIAU. This is due to the lack of desire from within
the student (internal) in improving financial accounting learning achievement and
the lack of external drivers in achieving high achievement. While the learning
approach influences the students' achievement in Accounting Department of
Economics and Social Sciences UIN SUSKA RIAU with significant value 0,041 <0,05.
This is due to the desire of students in studying financial accounting is very strong,
especially on the approach to learning with a high level.
Nafiati (2015) conducts research on students who have taken introductory
accounting courses in 22 public and private universities in Central Java. The result
of his research proves that student achievement in introductory course of
accounting is influenced significantly by all research variables (ability and effort,
intellectual skill, high school grades, college grades, emotional skills, and learning
environment).
Alanzi (2015) conducted a study of 156 students enrolled in the College of
Business Studies in Kuwait of the academic year 2012/2013. The results showed
that the influence of selected factors varied in effect on student achievement. The
attendance of lectures and college experience has the most significant influence on
student achievement, while gender, age, nationality, grades on secondary school
exams, secondary school branches, do not show a significant effect on student
achievement.
2.2 The Factors that Influencing Learning Achievement

According Syah in Novius (2012) factors that affect one's success in
learning are:
a. Internal Factor
Internal factors are factors that arise from within the individual itself, as for
which can be classified into internal factors, namely physioligis (physical) and
psychological aspects (interest, talent, intelligence, and motivation).
b. External Factor
External factors are factors that come from outside the students are divided into
two types, namely social environmental factors and non-social environmental
factors.
c. The quality factor of teaching
The quality of teaching is the quality of teachers and facilities in the learning
process.
2.3 Understanding Accounting
Accounting is the process of identifying, validating, measuring, recognizing,
classifying, merging, summarizing, and presenting basic financial data (accounting
material) occurring from the events, transactions, or operating activities of an
organizational unit in a particular way to produce information relevant to
interested parties (Suwardjono, 2014: 10).
Accounting is often referred to as art. The mention of accounting as an art is
meant to show that in practice accounting involves many value judgments that
require expertise and experience to choose the best treatment.
III. RESEARCH METHODOLOGY

3.1 Population
The population of this research are students of second semester (two)
Business Administration Study Program, Business English Study Program and
Informatics Engineering Department Program of State Polytechnic of Bengkalis.
The total population is 138 students, with 68 students of Business Administration,
54 Informatics Engineering students and 16 Business English students.
3.2 Models Used

This research consist of 2 (two) variables that are internal factor, external
factor and teaching quality factor as independent variable and learning
achievement as dependent variable. To further explain the effect of independent
variables with the dependent variable used in this study, then described the
research model as follows:
Independen Dependen
Intelligence, attitude,
Internal Factors (X1)
interests, talent and
Learning
Environment External Factors (X2) achievement
(Y)
Quality of lecturers and
Teaching Quality (X3)
learning facilities
Figure 3.1 Research model

3.3 Research Design
Each student has their own advantages and disadvantages. Differences in
the ability of students both internally, externally, or the quality of teaching will
affect the learning process of students. The learning process will determine the
results or values obtained as well. The value obtained will illustrate student
achievement. For more details can the author describe in the following chart:
Failed
Internal
No
Factors
Final
Students External Assessment Passed
Factors
Yes
Teaching Achievement
Quality
Figure 3.1 Research Design
3.4 Data Collection and Data Analysis Techniques

The data collected for this research are primary and secondary data.
Primary data were obtained by distributing questionnaires. While the secondary
data obtained by looking at transcripts of core accounting grades, especially the
financial value of each respondent. Basically, this study aims to describe a
particular state or phenomenon, which can provide supporting information for
further research.
Data analysis was done by using computer program, SPSS (statistical

package for social science) version 22. Data processing using multiple regression
test equipment.
IV. FINDINGS AND DISCUSSION

4.1 Normality test
Normality test is a test conducted to measure whether the data obtained
normal or abnormal distributed. The normality test will determine whether the
research data can be analyzed using parametric or nonparametric statistics.
In this study, the data normality test was performed using Kolmogorov-
Smirnov. The results of normality test data are as follows:
Table 2. Kolmogorov-Smirnov normality test
No Variable Test Result (Sign) Information
1 Internal Factor 5,3% Normal
2 External Factor 6,2% Normal
3 Teaching Quality 6,9% Normal
4 Learning Achievement 5,4% Normal
From the table above, it can be seen that the results of normality tests of
internal, external, teaching quality and learning pretensions are normally
distributed because the sign value is greater than 5%. Thus, hypothesis testing can
be done using parametric statistics.
4.2 The Influence of Internal Factors on Learning Achievement Introduction

to Accounting
The result of t test shows t value as big as 3,646, while t table value is 1,977
(d.f = 137, 5% significance), it is known that regression coefficient which measure
influence of internal factor to learning achievement of accounting introduction is
stated significant. This is due to the value of t arithmetic ≥ t table value or p value is
0.000 <0.05. It can be concluded that the internal factors significantly influence the
achievement of learning in the introductory course of accounting.
Table 3. Output t Test Influence of Internal Factors on Learning
Achievement
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta T Sig.
1 (Constant) 3.421 2.131 1.605 .111
Internal .367 .101 .317 3.646 .000
a. Dependent Variable: Name
Internal factors such as intelengensi, attitude, interest, talent and

motivation of students in study introduction accounting greatly affect the
achievement of students of Bengkalis State Polytechnic. This proves that the final
result achieved by the students in the introductory course of accounting is
determined from his or her own ability. But the result of this study is different
from research conducted by Novius (2012). Differences in the curriculum and the
learning process between the polytechnics and the
4.3 The Influence of External Factors on Learning Achievement of

Introduction to Accounting
The result of t test shows the value of t arithmetic is 0.124, whereas the
value of t table is 1,977 (d.f = 137, 5% significance), it is known that the regression
coefficient that measures the influence of external factors on the learning
achievement of accounting introduction is stated has no significant effect. This is
due to the value of t arithmetic ≤ t table value or p value of 0.902> 0.05. It can be
concluded that the external factors have no effect on the learning achievement in
the introductory course of accounting.
The results of this study are similar to the results of research conducted by
Novius (2012). Family environment, friends and campus environment have no
effect on student achievement or final result.
Table 4. Test Output t Influence of Internal Factors on Learning Achievement
Standardized
1 (Constant) 3.421 2.131 1.605 .111
Eksternal -.011 .087 -.010 -.124 .902
4.4 The Influence of Teaching Quality on Learning Achievement Introduction

to Accounting
The result of t test shows the value of t arithmetic is 4,280, while the value
of t table is 1,977 (d.f = 137, 5% significance), it is known that the regression
coefficient that measure the influence of teaching quality factor on the learning
achievement of accounting introduction is stated has a significant influence. This is
due to the value of t arithmetic ≥ t table value or p value is 0.000 <0.05. Can be
concluded that the quality of teaching factors significantly influence the
achievement of learning in the course, introductory accounting.
Table 5. Output t Test influence of Teaching Quality on Learning
Achievement
Standardized
1 (Constant) 3.421 2.131 1.605 .111
Eksternal -.425 .099 .348 4.280 .000
The vocational education curriculum which is laboratory based with 60%

practice and 40% theory. Vocational education requires adequate laboratory
equipment, interesting teaching materials, the availability of modules and books as
well as qualified lecturers in accounting.
V. CONCLISION AND SUGGESTION

This study aims to analyze the factors that influence student achievement of
State Polytechnic of Bengkalis in introductory course of accounting. The result of
the research proves that internal factor and teaching quality factor have an effect
on student achievement in learning introduction of accounting. On the other hand,
external factors have no influence on student achievement.
The limitation of this research is data collection using questionnaire only.
For the next researchers are expected to not only use the questionnaire but also
supported by the instrument interview.
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SADIES (SAWIT CANDIES): INNOVATION OF PALM SUGAR
CANDY TO REDUCE PALM RE-PLANTING WASTE AS A
SOLUTION OF COMMUNITY EMPOWERMENT WEST
MAREDAN VILLAGE TUALANG SUB-DISTRICT SIAK REGENCY
1Andika Satya(*),1Budi Setiawan, 1Ilham Fadhilah Perdana

Phone Number: 081270769200
E-mail:andikasatya1@yahoo.com
1Economic Development
Economics Faculty
Riau University
Abstract: This research explains alternative strategy of palm sugar product

innovation to become candy and choose development strategy priority to
empower West Maredan Village community so that it can depress
unemployment rate. To achieve the purpose of this research, the research
method used is qualitative descriptive and SWOT analysis for action plan on
product development and community empowerment of Maredan Barat
Village. The result found that the sugar used as raw material is palm sugar
derived from palm waste from re-planting. Where during this time, waste re-
planting of palm is never used and burned away without any proper
handlimg. This palm juice has a sweeter taste and a cheaper production cost
than other sugar such as aren sugar or coconut sugar. In the production
process, also empower people of West Maredan Village in the term of
acquisition and transportation of raw materials, processing, and packaging
the product. Strategies that can be developed are: (1) Provide training to IRT
in West Maredan Village in the form of processing palm sugar to candy palm
sugar and packing way in accordance with predefined standards with
characteristic Homeland Malay varied. (2) Facilitation programs for
strengthening business capital (grants, credits, etc.) (3) Institutional
cooperation for business development (4) Searching for potential markets.
Keywords: Palm sugar, Palm re-planting, Development strategy,
PRELIMINARY
Oil palm is one of plantation commodity wich has important role in economic
activity in Indonesia. Oil palm is also one of the plantations that have a very high
economic value. Indonesia is currently the largest oil palm producer in the world
followed by Malaysia and Thailand. Oil palm plantation area in Indonesia during last
few years tends to show an increase, from 2.77 to 11.33 percent per year. In 2010
Indonesia’s oil palm plantation area was recordeded at 8.55 million hectares,
increasing to 10.75 million hectares in 2014 or an increase of 25.80 percent. Riau
Province is the largest producer of oil palm in Indonesia. The plantation area of oil
palm in Riau Province has recorded 2.29 million hectares in 2014 or 21.30 percent
of total area of oil palm plantations in Indonesia. By 2015 the area of oil palm
plantations in Riau Province is estimated to increas to 2.38 million hectares
12 Andika Satya, Budi Setiawan, & Ilham Fadhilah Perdana
(Indonesia Oil Palm Statistics 2015).

Demand for oil palm is increasing from year to year, it’s followed by the
increas of land clearing for oil palm . However, all this time, the oil palm farmers only
use the fruit as CPO. Then in the re-planting process, unproductive trees are thrown
away without knowing that the palm juice obtained from palm trees can actually be
used to make new products with high added value of palm sugar.
West Meredan Village is one of the villages in Tualang Subdistric of Siak
Regency of Riau Province. This village has a central government in Meredan Barat
with 28.98 hectare of area. Like the majority of sub-districts in Siak Regency, the
largest production of the the agriculture sectore is cotributed by oil palm
plantationts. By 2015 the production of oil palm in Tualang Sub-district reaches
1.800 Ton. With considerable amount of oil palm production in Tualang Sub-District
particularly, the processed products from oilm palm tree’s juice ---palm sugar--- will
be very likely to be developed. Palm sugar itself can be derived into new product of
sugar palm candy.
Tabel 1. Population by Sex dan Sex Ratio in Tualang Sub-district 2015
Village Male Female Sex Ratio
Meredan 2.032 1.860 109

Tualang 7.652 7.793 98
Pinang Sebatang 2.250 1.687 133
West Meredan 1.439 1.297 110
Perawang 22.385 20.974 107
West Perawang 12.607 10.595 118
West Pinang Sebatang 2.796 2.587 108
PinangSebatang 4.822 3.956 122
East Tualang 2.049 1.854 111
Total 58.032 52.603 110
Source: Tualang Sub-district in Figures 2016

From the table above we can see that the west meredan village has a
population of 2.726 consisting of 1439 mens and 1.297 womens. Meanwhile, the
highest sex ratio of West Maredan Village is about 110. With this sex ratio in West
Maredan Village, it’s indicates the number of people who has job. By the
development of derivatives of palm sugar product can reduce unemployment in the
village of West Maredan, especially for housewife.
Therefore, the authors are interested to take the title of the paper: SADIES
(Sawit Candies): Innovation of Palm Sugar Candy to Reduce Palm Re-Planting
Waste As A Solution of Community Empowerment West Maredan Village
Tualang Sub-District Siak Regency
From the explanation above we can draw problem formulation that is:
Explaining alternative strategy of palm sugar product to be candy and choosing
development strategy priority to empower the community of West Maredan Village
so it can suppress unemployment rate.
Sadies (Sawit Candies): Innovation Of Palm Sugar Candy 13
MATERIALS AND METHODS

The materials used to make SADIES (Sawit Candies) is palm sugar derived
from the boiling of palm tree juice. With the extent of oil palm plantations in Riau
and West Maredan Village in particular, make the raw materials easily available. The
use of palm sugar that in fact has a sweeter taste of sugar will enrich the taste of
Candies which we will produce. The tools used for the production process is a large
cauldron with a spatula and tools to mold the candy. The method used in this
research is descriptive qualitative to explain the process palm juice to become palm
sugar candy. SWOT analysis is then used to measure the Strenghts, Weakness,
Opportunities and Challenges in the development of this sugar palm candy, as well
as to see its potential in empowering communities in West Meredan Village, Tualang
Sub-district, Siak Regency
RESULTS AND DISCUSSION

Palm Sugar Candy or Sawit Candies (SADIES) is a SMEs product of creative
industry-based. Processed sugar that used as raw material is palm tree juice that
comes from oil palm tree waste as the result of the re-planting. Where, during this
process, the waste of oil palm re-planting is not utilized and burned away without
proper handling by most oil palm farmers.
Chart of Production Process
Trees which are felled during the re-

planting process are cut into the ends so
they release the juice
Juice that came out are collected

approximately for 6 hours and then
filtered to separate it from the dirt
Nira yang telah bersih dari kotoran

direbus hingga matang. Kurang lebih
selama 4-5 jam
Before molding, the boiled juice is

stirred first so as not to colt
The final step is printing into SADIES

(Sawit Candies)
14 Andika Satya, Budi Setiawan, & Ilham Fadhilah Perdana
The burned oil palm trees will certainly have an impact on the environmental
issues of smoke burning of palm tree trunks. This is due to the lack of awareness of
the farmers with the reason of time and cost efficiency to re-planting palm trees.
This SADIES concept that utilizing re-planting palm trees waste is a solution to the
problem. This solution is done by socialize this concept idea and cooperate with oil
palm farmers around West Maredan Village, Tualang District, Riau Regency.
SWOT ANALYSIS
Strenght of SADIES is as follows:
a. Raw materials are easy to obtain
Palm is a leading community in Riau Province, the majority of farmers are
oil palm farmers with total area 2.38 million hectare (IPOS, 2015) of palm
plantation land. It’s means the availability of palm juice as raw material
for making Sawit Candies abundant so as to support the sustainability of
the production of Sawit Candies.
b. Skills
Expertise in processing palm juice into Sawit Candies that not everyone
can process it.
c. The product is durable
Palm Candies can last up to 3-6 months if stored in a dry place
d. Require not too larg capital to start the bussines
e. Helping oil palm farmers in reducing re-planting costs
The Weakness of SADIES is as follows:
a. Weather
Production of palm candies really depends on the weather because of rain
can stop the production process.
Opportunities of SADIES are as follows:
a. Marketting System
To marketting of Palm Sugar Candies is not difficult. Marketting can
be done by selling or entrusting to traditionall markets and modern
markets also Riau typical souvenir shops.
b. No competitor with same product and same concept
Until now there are still no competitors with the same product and
concept like we have. This will be a great opportinity for Sawit Candies
Threats of the business we estimate are as follows:
a. A new competitor comes up with the same product
In the production process, come to empower the people of West Maredan
Village in terms of the acquisition and transportation of raw materials, processing,
to packing the product. So trought this bussines will open new empowerment
opportunity for the people of West Maredan Village. The Strategies that can be
Sadies (Sawit Candies): Innovation Of Palm Sugar Candy 15
developed are : (1) Providing training for housewife in West Maredan Village in the
form of processing of palm sugar to palm sugar candy and product packaging in
accordance with determined standards. (2) Facilitation programs to strenghtening
business capital (grants, credits, etc) (3) Institutional cooperation for business
development (4) Searching for potential markets
CONCLUSION
Sawit Candies is a candy that made from boiling palm tree juice. This candy
is an innovation of oil palm tree juice that extracted from oil palm tree. The process
of making Sawit Candies is: 1) Trees that are felled when the re-planting process is
cut off in the top so that we extract the juice out. 2) The juice came out from the cute
tree are collected more or less for 6 hours and then filtered to separate them from
dirt. (3) Before molding, the juice is stirred to keep it from clot. 4) The final step is
mold the boiled juice into candy
In looking at the impacts for the people of West Maredan Village the
strategies that can be developed are: 1)Providing training to housewifes in West
Maredan Village such as processing palm sugar into palm sugar candy and product
packaging in accordance with determined standards. (2) Facilitation programs to
strenghtening business capital (grants, credits, etc) (3) Institutional cooperation for
business development (4) Searching for potential markets.
BIBLIOGRAPHY
BPS Siak Regency, 2016, Tualang In Figures 2016, Badan Pusat Statistik Siak
Regency
Indonesian Palm Oil Statistics 2015
Analysis of Business Efficiency of Agro-based Small & Medium Enterprises
(SMEs) in Kuok District, Kampar Regency of Riau Province
Evy Maharani1 and Yeni Kusumawaty 2*
1,2AgribusinessDepartment, Faculty of Agriculture, Universitas Riau

evy.maharani@unri.ac.id, yeni.kusumawaty@unri.ac.id
Abstract: Small and Medium Enterprises (SMEs) have a strategic role in

national economic development, and in addition to its role in economic growth
and employment, it also plays a role in the distribution of development results.
Agroindustry (small industry) has a prospect to be developed and better
management system is required to help the small-scale producers achieving
their financial goals. This study aimed to analyze the income and efficiency of
agro-based SMEs in Kuok District, Kampar Regency. This research applied
survey method which was conducted during September 2015 involving agro-
based SMEs who produce tofu and traditional ciremai cake in Kuok District.
The results showed that tofu and cake agroindustries were able to provide
financial benefits for the producers. The RCR values of the two industries were
>1 (1.30 for tofu industry and 1.72 for cake industry) thus showed that both
agroindustries are feasible. For tofu, unit-based BEP was 36.238 and revenue-
based BEP was IDR 5.444.444. For ciremai cake, unit-based BEP was 4.125,97
and revenue-based BEP was IDR 2.064.728,89. Agro-industry activities
provide added value of IDR 4,734 (tofu) and IDR 1,447 (cake) per one kg of
major ingredient, which support its financial prospect.
Keywords: Agroindustry; Food Industry; Return Cost Ratio; BEP, Tofu;
Traditional Cake
1. INTRODUCTION
Agroindustry as a subsystem in agribusiness is a mainstay sector to improve
economic growth so that the government should give intensive attention to the
development of agribusiness [1]. The formidable development of agriculture
supporting the process of sustainable industrialization can become more manifest
through the development of agro-industry [2]. Agroindustry is the processing of
agricultural products and therefore, agroindustry is part of five agribusiness
subsystems namely the subsystems of providing production facilities and
equipment, farming, processing (agroindustry), marketing, facilities and coaching
[3].
The industrial development program in Kampar Regency covers the main
program and supporting programs. The main program covers the development of
home industry, small and medium enterprises, industrial technology improvement
programs and industrial structure structuring programs. Supporting programs
include environmental pollution control programs, industrial information, training
and extension and research and development programs. Kampar regency is an area
that has many agroindustry products and one of the areas is Kuok District.
According to data from Department of Industry and Trade in 2014 the industries

Business Efficiency of Agrobased SMEs in Kuok District 17
were those producing sponge cake, paniaram, kemojo cakes, layer cake, pancakes,
putu ayu cake, corn pudding, banana cake, batik cake, cassava, sweet potato cake,
peyek, banana chips, sapik snack, tempeh and tofu [4].
Kampar Regency has considerable potential in producing agro-industrial
products. The agroindustries in Kampar regency, especially in Kuok District has
been developed for quite sometime and the products have been distributed at local
and provincial markets. In general, the agroindustry businesses in Kuok District are
household-scale businesses. In this regard, the development of the industrial sector
should be more directed to the development of agro-industries that support the
development of mainstay agricultural commodities of most farmers in Kampar
Regency to meet the quality standard of the market.
The government should be the partner institution of the home industries.
Agroindustry not only plays a role in marketing but also plays a role in creating
demand for agricultural products especially on raw material demand. Agroindustry
offers great potential and this potensial is supported by the availability of
agricultural raw materials that can be developed into small scale business. At a time
when agricultural products are abundant, the selling price is usually very low. By
developing agroindustry, the abundant produce can be processed into products
with added value and longer shelf-life. Therefore, small-scale agroindustry is needed
to community welfare. It also supports employment opportunities for local
communities and creates multiplier effects in Kampar Regency. The development of
superior commodities owned by Kuok District will open business opportunities for
the community, especially in rural areas. Therefore, the purpose of this study is to
analyze the income and financial efficiency of agro-based SMEs in Kuok District,
Kampar Regency.
The rest of the paper is organized as follow: in Section 2, we introduce works
related to this study. Section 3 describes the methodology. Then Section 4 describes
the results and discussions followed by the conclusions (Section 5).
2. Related Works/Literature Review

2.1. Small and Medium Enterprises (SMEs)
Small industry is a business entity that runs the production process to
produce goods and services on a small scale. When viewed from the nature and
form, small industries are characterized as follows: (1) based on local resources so
as to maximize potential and strengthen self-reliance (2) owned and implemented
by local communities so as to develop human resources (3) apply local technology
so that it can be implemented and developed by local personnel and (4) scattered in
large quantities so as to be an effective development equity tool [5].
Small and Medium Enterprises (SMEs) have a strategic role in national
economic development, because in addition to play a role in economic growth and
employment absorption also play a role in the distribution of development results.
In the economic crisis that occurred in our country since some time ago, where many
large-scale businesses that stagnated and even stopped its activities, the SME sector
proved to be more resilient in the face of crisis. The empowerment of SMEs needs to
gain great attention from both government and society in order to be more
18 Evy Maharani & Yeni Kusumawaty
competitive with other economic actors [6]. In 2012, there are more than 56 million
SMEs in Indonesia with more than 107 million people employed [7].
The characteristics of SME in Indonesia which indicate clearly the
importance of this industry to support economic growth are: (1) mainly owned by
locals and creates significant employment opportunities; (2) mostly agricultural-
based thus support rural livelihood; (3) labor intensive; (4) mainly source its
financial operation from individual savings; and (5) produce simple consumer
products, fulfil national demand and target on low income consumers [8].
2.2. Financial Efficiency
Financial assessment will help the people involved to find out if an enterprise
is in fact winning or making any profit [9]. Assessing financial aspect of agro-based
industries is crucial as prior studies showed that small enterprises are facing more
challenges such as limited capital, market access and increasing price of raw
material. Even worse, the soybean small-scale processing industries in Siak Regency
paid limited attention to their financial record which have restricted them from
calculating the business profit [10].
Efficiency has the goal to minimize production cost per unit of product to gain
optimal profit. This goal can be achieved by minimizing overall costs while securing
current production to increase production without increasing the total cost [11].
Business efficiency can be calculated by comparing amount of revenue and cost used
for producing by using R/C Ratio criteria which is used to determine efficiency of
business. If R/C > 1 then the business is efficient [12].
3. Methodology
3.1. Data
Primary data was obtained through direct interviews with small-scale
business owners and secondary data were obtained from related institutions and
literature studies.
3.2. Method
The research was conducted in Kuok District of Kampar Regency on
September 2015. The research location was chosen purposively. Selection of the
study area was based on a consideration that Kuok District is a central location for
agro-based small enterprises. This research applied survey method. Sampling of
agro-industries is purposively selected on the largest scale of production and is
widely developed by the community. Among 16 agro-based SMEs in Kuok District,
tofu and traditional ciremai cake indusry were selected purposively due to the
highest number of labour and time doing business, largest production scale and
commonly conducted by local society.
Income of agro-based industries in Kuok District was analyzed by descriptive
qualitative and quantitative methods. The main analysis used to determine whether
or not a business feasible is determined by calculating the value of RCR (Return Cost
Ratio), Break-even Point (BEP and added value. The RCR value is derived from the
ratio of total gross revenue to total production cost [13].
a. Analysis of net income of agroindustry used the formula [14], as follow:
π = TR – TC
π = Yi. Pyi – (∑ Xi.Pxi + TFC)
Description: π = Net income (IDR / production process), TR = Gross income
(IDR / production process), TC = Total production cost (IDR / production process),
Yi = Total production (IDR / unit), Pyi = Production price (IDR / unit), Xi = Number
of production factors used, Pxi = Price of production factor used, TFC = Depreciation
of equipment (IDR/ unit / production process).
b. Analysis to know the efficiency of effort used analysis of Return Cost Ratio (RCR)
[15].
TR
RCR =
TC
Description: RCR = Return Cost Ratio, TR = Gross Income (IDR / production

process), TC = Total Production Cost (IDR / production process) with the following
criteria:
RCR> 1 = Every single rupiah incurred generates revenues greater than one rupiah,
meaning agroindustry business is profitable to be conducted.
RCR = 1 = Every single rupiah incurred generates revenue of one rupiah, meaning
effort at breakeven point.
RCR <1 = Every single rupiah earned earns less than one rupiah, meaning it is not
feasible to proceed.
c. Break-Even Point (BEP) Analysis
BEP based on production unit is calculated as follow:
TFC
BEP (Q) = _____________
P/unit – VC/unit
Description: BEP (Q) = unit-based break-even point, TFC = Total fixed costs,
P = Selling Price, VC = Variable cost
BEP based on IDR is calculated as follow:

TFC
BEP (IDR) = ______________
1 – (VC/TR)
Description: BEP = break-even point based on IDR, TFC = Total Fixed cost, VC =
Variable cost,
TR = Total revenue
d. Added value analysis.

To obtain added value, the formula is as follow:
NT = NPJ - (NBK + NBP)
Description: NT = Value Added (IDR / production process), NPJ = Product

Value (IDR / production process), NBK = Value of major ingredients (IDR /
production process), and NBP = Value of Supporting ingredients (IDR / production
process)
4. Results and Discussion

4.1. Profile of agro-based SMEs
Tofu agroindustry owned by Mrs Hasmiati runs its production daily. This
Agroindustry produces tofu and tempeh which are well-known soybean products in
Indonesia. The initial capital invested by this self-owned business was
approximately IDR 100.000.000, which was used to purchase production
equipments, raw materials and to build the production rooms. This small-scale
enterprise has obtained a trading business license (SIUP).
Marzidah cake industry was founded by Mrs. Marzidah in 1988. This dried
sponge cake is known as ciremai cake and is a traditional product of Kampar
Regency, catering specific market for souvenir product. The initial capital of the self-
owned business was IDR 100,000,000 which was used for the purchase of
equipment and production materials and for building the production areas. This
small business has secured the legality of the business by having permission from
the Health Department, trading business license (SIUP) and has been registered
with the Industry and Trade Agency (DISPERINDAG). The traditional ciremai
sponge cake is small in size with diameter of approximately 3-4 cm. These cakes
have slightly crunchy and dry appearance with shelf-life of 1-2 weeks. Mrs Marzidah
is able to produce 3,500 sponge cakes daily and on market day there is an increase
in production as much as 1,500 to 2,500 cakes.
4.2. Income, RCR and BEP Analysis

a. Tofu Agroindustry
Tofu is made from soybeans as the major ingredient, and vinegar as
additional major ingredient. In addition to soybeans and vinegar producers also
require supporting ingredients. These supporting ingredients consist of fuel, such
as fire wood and diesel, and electricity.
Cost analysis, calculation and net income per month for tofu product are
presented in Table 1. Table 1 shows that the monthly variable cost is IDR 37.310.000
which is the sum of major ingredient, additional major ingredient and supporting
ingredient. While the fixed cost incurred each month is IDR 4,577,004 which is the
sum of depreciation costs of equipment, labor costs and kiosk rental cost.
Depreciation expense of IDR 176,994 represents depreciation expense for
equipment whose economic age is more than 5 years with relatively high purchase
value. The monthly labor cost is derived from the calculation of Working Day (HOK)
and labor cost per Working Day (HOK). HOK is obtained by calculating the
multiplication between the numbers of hours worked, the number of workers, and
the number of working days. Then the result divided by the determination of the
number of working hours in one day which is 7 hours. Labor costs per HOK is the
cost incurred per hour in one day.
Table 1. Calculation Of Costs, Revenues, And Net Income Per Month For Tofu
No Description Total (IDR) Percent (%)

1 Production cost 41.887.004 100
Fixed Cost 4.577.004 10,93
a. Depreciation cost of equipments 176.994 3,87
b. Labor cost 2.880.000 62,92
c. Kiosk rental cost 1.520.010 33,21
2 Variable cost 37.310.000 89,07
Major ingredient
a. Soybean 31.680.000 84,91
Additional major ingredient
a. Vinegar 210.000 0,56
Supporting ingredient
a. Fire wood 1.620.000 4,34
b. Fuel 900.000 2,41
c. Transport cost 2.400.000 6,43
d. Electricity 500.000 1,34
3 Total production value 136.080
4 Selling price 400
5 Revenue 54.432.000
6 Net Income 12.544.996
The net income of the business is the difference between the demand and the
business expenditure within a certain time whether it is sold or not sold. Revenue is
calculated by multiplying the total production at the prevailing market price. While
total business expenditure is the value of all inputs that are used or spent in the
production process. Net income is useful to measure the benefits derived from the
use of factors of production such as building, labor, capital and processing

equipment [16].
Total production of 136,080 pieces of tofu obtained from the average amount
of production each month with the selling price per piece of IDR 400 so that
producer get a gross acceptance of IDR. 54,432,000. Therefore, as shown in Table 2,
the profit (net income) that the producers can earn each month is IDR 12,544,996
from tofu processing.
Business feasibility analysis is used to measure business returns in applying
a processing technology. As a benchmark is the revenue and expense ratio or RCR.
If RCR > 1, then the business is financially feasible. If RCR < 1 then it is not financially
feasible and if RCR = 1 then it is in a break-even point (no profit or loss) financially.
Based on the analysis of agro-industry generates revenue of IDR 1.30. Value of 1.30
indicate that RCR > 1 this means the tofu industry gained financial benefit.
Table 2. Return Cost Ratio For Tofu Industry
No. Description Value (IDR)
1. Revenue 54.432.000
2. Total Cost 41.887.004
3. Revenue Cost Ratio (RCR) 1,30
Break-even Point (BEP) is an analytical tool used to determine the

relationships among several variables in the company's activities, such as the area
of production or the level of production performed, the costs incurred and the
income received by the company from its activities. Table 3 shows the BEP
calculations on the basis of production units and IDR unit for tofu industry.
Tabel 3. BEP and Added Value For Tofu Industry
No. Description Value (IDR) / month

1 Fixed Cost 4.557.004
2 Variable Cost 37.320.000
3 Selling Price 400
4 Total Production Value 136.080
5 Revenue 54.432.000
6 Unit-based BEP 36.238,60
7 Revenue-based BEP 5.444.444,44
Added value
8 Added value (IDR) 17.045.006
9 Added value per 1 kg major ingredient (IDR) 4.734,72
The calculation of the break-even point (BEP) based on production unit

indicated that the minimum production to avoid a loss or break-even occurs when
the producer makes 136,080 tofu each month (3,600 kg of soybeans). This shows
that this agro industry is profitable. However, if the productivity of the tofu product
is lower than BEP value (136,080 pieces per month), then the agro-industry knows
it will suffer losses.
The calculation of the break-even point (BEP) in IDR was Rp 5,444,444.44.
Revenue of producer were IDR 54,432,000. This means that current revenues are
greater than the IDR value at the time of BEP, which means that the agro-industry
was profitable. Output is the result of a production process (tofu product). The
average output produced during the month was 136,080 pieces tofu with average
major ingredient usage of 3,600 kg of soybeans.
Agro-industry activities can provide added value to agricultural products.
The added value generated from tofu agroindustry amounted to IDR 17,045,006
during the month (568,166,86 per production process) and IDR 4,734.72 per one kg
of major ingredient.
b. Traditional Ciremai Cake Industry

Cake Agroindustry is one of food products made from wheat flour (Figure 1).
Cake agroindustry in Kampar regency is one of cottage industries providing
livelihood for local people. This industry can be categorised as home industry due
to use of technology that is relatively simple, labor-intensive and production
activities conducted by producer is mainly depend on the availability of raw
material instead of market demand. Cost analysis, calculation and net income per
month for cake product can be seen in table 4.
Figure 1.
Traditional Ciremai Dried Sponge Cake Industry in Kampar Regency
Table 4. Calculation Of Costs, Revenues, And Net Income Per Month For Cake
1 Production cost 16.318.728
Fixed Cost 929.128 100,00
a. Depreciation cost of equipments 75.800 8,16
b. Labor cost 640.000 68,88
c. Kiosk rental cost 213.328 22,96

2 Variable cost 15.389.600 100,00
Major ingredient
a. Wheat flour 3.200.000 20,79
b. Sugar 3.200.000 20,79
c. Egg 6.656.000 43,25
Additional major ingredient
a. Vanilli 20.000 0,13
b. Cooking oil 33.600 0,22
Additional ingredient
a. Plastic bag 360.000 2,34
b. Electricity 320.000 2,08
c. Gas fuel 1.600.000 10,40
3 Total production value 56.000
4 Selling price 500
5 Revenue 28.00.0000
6 Net Income 11.681.272
Analysis of costs and revenues in this cake agro industry used monthly data
taken from cake producer with the largest production. Cost and income analysis is
expected to provide information about the estimated costs incurred in each process
and the income earned by cake producer every month.
The amount of production of cake agroindustry of 56,000 pieces was obtained
from the total unit of cakes baked per day. With the selling price per piece of cake
was IDR 500, the producer received the revenue (gross income) of IDR 28,000,000.
Therefore, as shown in Table 4, the profits (net income) that the cake producer
receive each month was IDR 11,681,272.
Analysis of agro-industry efforts made by cake producer showed the RCR value
of 1.72. That is, every IDR 1 expenses will generate revenue of IDR 1.72. The value
of 1.72 indicate that RCR> 1 which means agroindustry efforts undertaken by
producer is considered profitable.
Table 5. Return cost ratio for ciremai cake industry

No. Description Value (IDR)
1. Revenue 28.000.000
2. Total Cost 16.318.728
3. Revenue Cost Ratio (RCR) 1,72
The calculation of the break-even point (BEP) based on production unit

indicated that the minimum production to avoid losses occurs when the producer
makes 56,000 pieces of sponge cake per production process (Table 6). This shows
that this agroindustry is profitable. However, if the productivity of this sponge cake
product is lower than that value (56,000 pieces per production process), then the
cake agroindustry business will suffer losses. The calculation of the break-even
point (BEP) in IDR was 10,134,600. The revenue received by the producer was IDR
28,000,000. This means that the current revenue is greater than the revenue at the
time of BEP, which means that the cake agroindustry is profitable.
The added value generated from the cake agro-industry was IDR 10,134,600 per
month and IDR 1,447.80 per kg of major ingredient.
Tabel 6. BEP and added value for ciremai sponge cake industry
No Description Value (IDR) / month
1 Fixed Cost 929.128
2 Variable Cost 15.389.600
3 Selling Price 500
4 Total Production Value 56.000
5 Revenue 28.000.000
6 Unit-based BEP 4.125,97
7 Revenue-based BEP 2.064.728,89
Added value
8 Added value (IDR) 10.134.600
9 Added value per 1 kg major ingredient (IDR) 1.447,80
5. CONCLUSION
The tofu agro-industry and cake agroindustry provide financial benefits. Tofu
agroindustry showed gross revenue of IDR 54,432,000 and net income of IDR
12,544,996 per month. RCR value was greater than 1 (1.30) which means the
industry is financially efficient. Gross income from cakes agroindustry was IDR
28,000,000 and net income was IDR 11,681,272. RCR value greater than 1 which
was 1.72 which means the industry was financially efficient. Values of 1.30 and 1.72
showed that RCR> 1 and this means both tofu and cake small-scale enterprises
undertaken by the producer is eligible to be developed and already profitable. Agro-
industry activities of tofu and sponge cake products provide added value of IDR
4,734 and IDR 1,447 respectively per one kg of major ingredient, which support its
financial prospect.
References
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Regency. Jom Faperta 2 (1) (2015).
[2] Yasin, A.Z.F. Masa Depan Agribisnis Riau. Unri Press, Pekanbaru.
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[3] Soekartawi. Agroindustri dalam Perspektif Sosial Ekonomi. PT Raja

Grafindo Persada. Malang. (2005)
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Pedesaan. Makalah Pengantar Falsafah Sains Program Pasca Sarjana
Institut Pertanian Bogor. (2005).
[6] Wenagama, W. I. Peranan Usaha Kecil dan Menengah Dalam

Penyerapan Tenaga Kerja dan Tingkat Pendapatan Masyarakat Miskin
di Kecamatan Abiansemal Kabupaten Badung. Buletin Studi Ekonomi
18(1). (2013).
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Brylian, A. K. A. Gumawang and A. Makmun. A SWOT Analysis Tool for
Indonesian Small and Medium Enterprise. ARPN Journal of
Engineering and Applied Sciences 12 (2):620-625. (2017).
[8] Tambunan. (2009). cited in Anton, S.A., I. Muzakan, W. F. Muhammad,

Syamsudin, and N. P. Sidiq. An Assessment of SME Competitiveness in
Indonesia. Journal of Competitiveness 7(2): 60 – 74 (2015).
[9] Santacoloma, P., A. Röttger and Florence Tartanac (Eds). Business

Management for Small-scale Agro-industries. FAO Agriculture
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Agro-Industries Division. (2009).
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Kedelai. Jurnal Pendidikan Ekonomi dan Bisnis 3(1):438-446. (2011)
[11] Ibrahim, Y. Studi Kelayakan Bisnis. Jakarta: PT. Rineka Cipta. (2009).
[12] Cepriadi, E. Sayamar and C. Irawan. Analisis Usaha dan Strategi

Pemasaran pada Penangkaran Ikan Arwana PT Sumatera Aquaprima
Buana Muara Fajar Rumbai Pekanbaru. Jurnal Ilmu Ekonomi Pertanian
Indonesia (IJAE) 1(1):45-54. (2010).
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EFFECTS OF POLITICAL CLOSENESS AND CAPITAL EXPENDITURE
ON REGIONAL ECONOMIC GROWTH
(Empirical Studies at Regency and City Governments in Indonesia)
(Raden Yudi Prawira Anjaya, Hefrizal Handra, Elfindri, Efa Yonnedi)
ABSTRACT: Political closeness between the executive and the legislature will
affect the process of preparing the local budget. The stronger the political
closeness, the easier it will be in preparing the local budget because of the
same political interests and goals. However, when viewed from one of the
functions of the legislature as an executive supervisor, the stronger the
political closeness, the legislature tends to be weak in control over the
executive work. From the results of this study is expected to find an answer
whether the political closeness and local government spending will affect the
regional economic growth. This study aims to determine the effect of political
closeness and government capital expenditure on economic growth at the
district government in Indonesia. The political closeness between the
executive and the legislature is a dummy variable. Data analysis used panel
data method with 456 districts in 2010-2014. The panel data estimation
method by choosing the most appropriate model is common effect, fixed effect
and random effect using hausman test, chow test and Langrange Multiplier
test. The results showed that the political closeness has a significant effect on
economic growth and has a negative coefficient, which means that political
closeness causes the decline of regional economic growth. Regional capital
expenditure has a significant effect on economic growth and has a positive
coefficient, which means that the greater allocation of regional capital
expenditure will lead to higher regional economic growth.
Keywords : political economics, government expenditure, economic growth
I. INTRODUCTION
The closeness between the executive and the legislature, especially those
from the winning party, will certainly have an effect on the process of preparing the
regional budget. The stronger the political closeness between the executive and the
legislature, the easier it will be in preparing the regional budget because of the same
political interests and goals, And vice versa if the weaker the closeness between the
executive and the legislature will cause the budgeting process to cause a debate to
bring together different political goals and interests prior to the deal.
However, when viewed from one of the functions of the legislature as an
executive supervisor, the stronger the closeness between the executive and the
legislature, The legislature tends to be weak in exercising control over the

28 Raden Yudi Prawira Anjaya, Hefrizal Handra, Elfindri & Efa Yonnedi
executive's work as the executor of development in the region. Conversely, if the

closeness between the legislature and the executive is weak, then the supervisory
function tends to be more intense by the legislature. Executives' mistakes or
irregularities will soon get a response from legislators for immediate amendment.
Currently it is still a question of whether strong or weak the closeness
between the executive and legislative will affect the regional economic performance
And if it affects whether it has a positive impact or has a negative impact on
improving regional economic performance.
Government expenditure is an important instrument in stimulating the
regional economy. The amount of local revenue allocation that can be used for
government expenditure will encourage faster economic growth. Adjustment
process for better economic condition can be done by changing the structure of
expenditure.
Changes in the amount and structure of local government expenditure by
political officials will certainly affect the changes in budget outcomes in the form of
regional economic growth. Some literature shows the varied relationship between
Government expenditure and Economic Growth, Some find a positive relationship
in the sense that if government expenditure increases then economic growth
increases, But there is also the opposite, finding a relationship where if government
expenditure increases then economic growth will decline.
While other researchers found the two relationships both positive and
negative between government expenditure and economic growth depending on the
components of expenditure studied. This means that the relationship between
government expenditure and economic growth can be negative or positive
depending on government policy in allocating and distributing government
expenditure.With regard to the above explanation, the researcher is interested to
analyze the effects of political closeness and regional government capital
expenditure on changes in regional economic growth. This research aims to analyze
the effects of political closeness and regional government capital expenditure on
changes in economic growth
II. LITERATUR REVIEW
1. Political influence on government expenditure and economic performance.
There are many factors that determine the size and structure of local
government expenditure. According to Alesina and Wacziarg (1998) the size and
structure of government expenditure is influenced by economic standards and
demographic standards such as income levels, growth rates, population,
demographic structure and level of trade participation. On the other hand, the
standard alternative used to describe the size and structure of expenditure is the
government's political variables. According to Bawn and Rosenbluth (2006), politics
plays an important role in determining the size and structure of expenditure . In the
democratic political system, the elected government has the power to organize and
allocate regional expenditure annually.
Effects Of Political Closeness And Capital Expenditure On Regional Economic Growth 29
Some researchers have found how political variables can influence changes
in expenditure both in the form of an increase in the amount of government
expenditure that can lead to budget deficits as well as changes in the structure of
government expenditure. In relation to the electoral cycle, Drazen and Eslava
(2005), found that before the election, the composition of the leaning expenditure
led to goods beneficial to the interests of larger voting groups who became the
political target for voters. Dash and Raja (2012) found that the ideologies of party-
controlled governments also contributed significantly to increased expenditure,
primarily through direct expenditure.
Based on the variable of political power, Ferraz and Finan (2011) argue that
the greater the political power of the ruling party in a region leads to a larger
proportion of the allocation of regional income for development expenditure.
Further Kaushik and Pal (2012) find that the political power of the ruling party in a
region is an important determinant of the allocation of income budget for
development expenditure in an area. the political power of the ruling party gives a
significant effect on the decision on the allocation of government expenditure, the
greater the power of the ruling party in a region will significantly lead to a larger
proportion of the revenue budget for development expenditure
Other opinions show different results, where political variables have no
effect on changes in government expenditure. Galli and Rossi (2002) show that in
the preparation of budgets at the local government level Germany is far from the
influence of political ideology. Kaushik and Pal (2012) also state that the ideology of
political parties does not have a significant impact on the decision of budget
allocations from local governments in India.
2. Efect Government expenditure to economic growth

Government expenditure is the value of government spending that is used
for the benefit of the community. Expenditures to provide education and health
facilities, expenditures to provide police and soldiers, salary expenditures for
government employees and expenditures to develop infrastructure are made for the
benefit of the community. Government expenditure reflects the policies that have
been taken by the government. If the government has established a policy to
purchase goods and services, government expenditure reflects the cost to
implement the policy
Changes in the amount and structure of local government expenditure by
political officials will certainly affect the regional economic growth. Some literature
shows the varied relationship between Government expenditure and Economic
Growth, Some found a positive relationship (Liutang 2002; Fan 2003; Clement
2010) In the sense that if government expenditure increases then economic growth
increases, But there is also the opposite, finding a negative relationship (Kormendi
1985, Landau 1986, Barro 1990, De Gregorio 1992, Engen 1992), where if
government expenditure increases then economic growth will decrease.
While other researchers found the two relationships both positive and
negative between government expenditure and economic growth depending on the
components of expenditure studied (Devarajan, 1996). This means that the
relationship between government expenditure and economic growth can be
negative or positive depending on government policy in allocating and distributing
government expenditure. Government policy is of course strongly influenced by the

policy of the regional heads of legislative members as political officials.
III. DATA AND VARIABLES
This study using panel data. Panel data have time series and cross section
characteristics. This research used 456 regencies / cities or about 88% of the total
districts in Indonesia in the period 2010-2014.
To measure the political closeness variables ( ) between the executive
and the legislature is measured by the variable dummy by looking at the party
relationship between the political parties supporting the regional head and the
majority party in the legislature. Point 1, if there is a strong closeness between the
executive and the legislative. A strong closeness occurs when parties supporting the
Regional Head at the time of nomination is the majority party in the legislature. Point
0, if there is weakness between the executive and the legislative. A weak closeness
occurs when parties supports the Regional Head at the time of nomination not from
the legislative majority party.
Capital expenditure variable ( ) is measured from the realization of capital
expenditure allocated by the district government expressed in rupiah during the
study period, while the regional economic growth variable (Y) is measured from
the Gross Domestic Product (GDP) for each district . Other variables such as the
period of political office( ), personnel expenditure ( ), social expenditure ( ),
income per capita ( ), per capita land tenure( ), the number of local civil
servants ( ) and the population of the region ( )) are assumed to be control
variables.
IV. MODEL SPECIFICATION

To analyze effect of independent variable to dependent variable in this
research used regression equation as follows :
= + + + + + + + +
+ +
Estimates use time series data and cross sections simultaneously, known as
Data Panel analysis. Using panel data will be better than using time series and cross
section separately. Generally using panel data we will generate intercept and slope
coefficients different for each region and every time period. In this research the
method used to estimate regression model with panel data are common effect
model, fixed effect model and random effect model.
Basically the three models of panel data regression estimation above can be
selected depending on the number of analysis units and their research variables.
However, there are several ways that can be used to determine which technique is
most appropriate in estimating panel data parameters. First, the chow test is used
to determine between the commom effect model or the fixed effect model that is
best used in estimating panel data. Second, the hausman test used to choose
between the fixed effect model or random effect model the most appropriate is used.
Third, the lagrange multiplier test is used to choose between the commom effect
model or the random effect model.
V. RESULT ESTIMATION.
Modeling in using panel data regression technique can use three alternative
model that is common effect model, fixed effect model and random effect model,
produce information as follows:
Tabel 1: Regression Results Common Effect Model, Fixed Effect Model And
Random Effect Model For Dependent Variables Economic Growth
VARIABEL COMMON EFFECT FIXED EFFECT RANDOM EFFECT

Prob. Durbin Prob. Durbin Prob. Durbin
Watson watson Watson
X1 0.6919 0.0136 0.6931
X2 0.0000 0.0159 0.0005
X3 0.0418 0.0295 0.0246
X4 0.0115 0.0000 0.0000
X5 0.0052 0.978 0.707 0.4291 0.998 1.987 0.3482 0.931 1.721
X6 0.0000 0.0000 0.0000
X7 0.0211 0.0021 0.8315
X8 0.3749 0.0000 0.0000
X9 0.0000 0.0000 0.0000
Sumber : Output Eviews 8
Durbin Watson value on the common effect model of 0.707 shows the numbers
that have not been good enough. For fixed effect model and random effect model
with Durbin Watson value of 1.987 and 1.721 already shows good numbers. The
fixed effect model has Durbin Watson value which is bigger than the random effect
model which means the fixed effect model is better than the random effet model.
The three models estimated will be selected which model is most appropriate in
accordance with the purpose of research by using chow test and hausman test, with
the following results:
Tabel 2 : Estimation Results of Panel Data Regression With Chow and

Hausman Test Models For Dependent Variables Economic Growth
Redundant Fixed Effects Tests – Chow test

Effects Test Statistic d.f. Prob
Cross-section F 50.416188 (455,1815) 0.0000
Cross-section Chi-square 5957.449359 455 0.0000
Correlated Random Effects - Hausman Test

Test Summary Chi-Sq. Statistic Chi-Sq. d.f. Prob
Cross-section random 942.574674 9 0.0000
Sumber : output eviews 8
Chow test is done to choose which is best between common effect model and
fixed effect model. In the table above shows that the probability value of cross-
section chi-square is 0.0000 which is < 0.05 so that it can be concluded that the fixed
effect model is more appropriate than the common effect model. Hausman test is
done to choose which model is best between fixed effect model and random effect
model. In the table above shows that the probability value of cross-section random
is 0,0000 whose value is < 0,05 so it can be concluded that the fixed effect model is
more precise than the random effect model. The result with Chow and Hausman Test
states that the selected model of the three possible models is the fixed effect model.
Tabel 3 : Estimation Results of Panel Data with Fixed Effect Model For
Dependent Variable Economic Growth
Based on the result of data processing with fixed effect model, it is known
that the political closeness ( ) significantly affects economic growth (probability =
0.0136). Through the regression slope can be known the direction of the
relationship between the variables analyzed. The slope of political closeness to
economic growth is valuable - 0.011990 which means having a negative coefficient
which can be interpreted that the strong closeness of political relations between the
legislature and the executive will lead to declining regional economic growth and
otherwise the weak political relations between the legislature and the executive will
encourage higher economic growth . This condition can occur for several reasons as
follows :
a. The close relationship between the legislature and the executive leads to the
implementation of legislative tasks in terms of supervision of executive duties in
accordance with the mandate of legislation becomes not optimal. Not optimal
this legislative supervision causes the proposals of development activities are
not well criticized by the legislature so that the efficient and effective use of
budget becomes not optimal.
b. Political closeness between the legislature and the executive can lead to
collusion, so as to make the policy taken more grounded in order to fulfill
political interests as a priority, while policies for the public interest and
improvement of the local economy are neglected.
Based on the results of data processing with the fixed effect model is known
that regional government capital expenditures affect significantly to economic
growth (probability = 0.0159). The slope of regional government capital
expenditure on economic growth is worth 0.010515 which means having positive
coefficient, which can be interpreted that the bigger allocation of regional capital
expenditure will increase the regional economic growth and the smaller the
allocation of regional capital expenditure will cause the decrease of regional
economic growth. Some reasons may be raised why an increase in capital
expenditure can boost economic growth :
a. Infrastructure development requires production factors, so as to encourage
owners of production factors in the area to increase production due to increased
demand which will ultimately increase the regional GDP.
b. Infrastructure that has been built, can be used by the community to facilitate the
flow of distribution factors of production and distribution of goods / services,
reduce transportation costs, speed up distribution time, attract new investors so
that in the long term is expected to increase economic growth.
Regional government capital expenditure causes a positive effect on
economic growth. This study is in line with the outcomes determined by Devarajan
(1996) which examines the relationship between the type of government
expenditure component and economic growth. Using the annual data from 43
countries of the 1970 to 1990 period using the ordinary least squares method found
that capital expenditure has an important role in development. The composition and
volume of public expenditure is an important factor in economic growth, but
excessive expenditure volume can lead to unproductive conditions for economic
growth.
Hong, H. and Ahmed, S. (2009) using data panels from 14 Indian states from
1990 to 2002 explain how part of government expenditure on public goods such as
health, education and infrastructure has an impact on GDP growth and reduction
poverty. The results of his research show that the expenditure of public goods gives
a big influence, positive and significant to the growth of regional GDP.
Gupta (2002) using data from 1990, 1997 and 2003 in India reinforced the
notion that development expenditure has a serious impact on growth and
development, particularly in the case of developing countries. Levine, (1992) used
data from the World Bank and the International Monetary Fund, examining with a
sample of 119 countries (excluding the largest oil exporting countries) from 1960
to 1989 finding a strong positive correlation between government investment
spending on economic growth.
Zagler and Durnecker (2003) by separating government expenditure into
productive and unproductive government expenditure based on their impact on
economic growth, found that the growth of public expenditure on investments and
infrastructure had a positive impact on the rate of economic growth.
VI. CONCLUSION
The conclusions of this study are :

1. The slope of political closeness to economic growth having a negative coefficient
which can be interpreted that the strong closeness of political relations between
the legislature and the executive will lead to declining regional economic growth
and otherwise the weak political relations between the legislature and the
executive will encourage higher economic growth.
2. The slope of regional government capital expenditure on economic growth
having positive coefficient, which can be interpreted that the bigger allocation of
regional capital expenditure will increase the regional economic growth and the
smaller the allocation of regional capital expenditure will cause the decrease of
regional economic growth
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Allocation Of Publik Expenditure : A Study Of Indian States. Universities of
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Compositionof Public Expenditure And Economic Growth. Journal of Monetary
Economics.
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: Theory And Evidence. NBER
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Fan, Shenggen. dan Neetha, Rao. 2003. Public Spending In Developing Countries :
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Western German Lander. ProQuest Sociology.
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Growth and Poverty”. Economic and Political Weekly.
Kaushik, Arum dan Pal, Rupayan. 2012. Political Stronghold And Budget Allocation
For Developmental Expenditure : Evidence From Indian States 1971 – 2005.
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Growth, Cross-country Evidence. In Journal of Monetary.
Landau, Daniel, 1986, Government and Economic Growth in the less Developed
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Liutang, Gong, dan Heng-fu Zou. 2002. Effects of Growth and Volatility in Public
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Journal Of Economic Surveys Vol. 17, No. 3
ABSTRACTS
The 2nd International Conference

on Economic Development
“Indonesia Economic Policy in the Changing
World”
Pekanbaru, 9 October 2017
Department of Economics
Faculty of Economics & Business
Universitas Riau
THE EFFECT OF CORPORATE GOVERNANCE ON TAX AVOIDANCE (EMPIRICAL
STUDIES ON MANUFACTURE COMPANIES LISTED ON INDONESIAN STOCK
EXCHANGE IN 2012-2015)
Rusli, Julita and Mudrika Alamsyah Hasan

Faculty of Economics Riau University, Pekanbaru, Indonesia
ABSTRACT
This research aims to determine the effect of corporate governance, financial

performance, and leverage on tax avoidance on manufacture companies listed on
Indonesian Stock Exchange in 2012-2015. The data used in this research were
secondary data from financial data in Indonesian Stock Exchange. The method used
in this research was multiple linear regression. The sampling method used was
purposive sampling which counted 10 companies with total obervation on 30
companies in 3 observation years (2014-2016). The results of the hypothesis test
showed that institutional ownersip and leverage have negative effect on tax
avoidance with 0.000 and 0.021 significance. Intensity of audit committee meeting,
audit quality, and ROA have positive effect on tax avoidance with 0.017, 0.004, and
0.000 significance. The influence of corporate governance, financial performance,
and leverage on tax avoidance is 48.6% while the remaining 51.4% is influenced by
other variables.
Keywords : managerial ownership; independent commissary proportion; intensity

of audit committee meeting; audit quality; tax avoidance

SIGNALING OF PRIVATE INFORMATION ON ELECTION
Eka Dewi Anggraini

University of Bengkulu
ekadewia@yahoo.co.id
ABSTRACT
Competence is a private information only known by himself and cannot be verified.
If someone has private information, he will try to use it in his own personal interests.
Someone is never interested in revealing private information if he obtains greater
utility by keeping it secret. Solution to this problem is using a signal that is some
activity, or some decision that proves that someone concerned has a certain ability
or characteristic. This paper aims to solve the problem of private information
signaling between governor and voters in Province of West Sumatera. There are
three signals of characteristic as variable are education, platform, and track record.
The data collected by interview and processed with statistic descriptive and
discriminant analysis. Using principal agent theory we found that voters are more
credible to track record as signal to represent competence than the other signals.
Most of them suppose it takes a long time to build a good track record. The rest argue
that competence is measured through a track record.
Keywords : characteristic; competence; unverifiable; signal

THE ANALYSIS OF PREPAREDNESS OF COASTAL FISHING INDUSTRY
IN ADOPTING BIOLOGICAL ASSETS APPROACH FOR FINANCIAL REPORTING
SYSTEM
Emrinaldi Nur DP
Faculty of Economics and Business, Riau University
ABSTRACT
Micro, Small and Medium Enterprises (MSMEs) since the first economic crisis in
1998 and the second economic crisis in 2008 has become an important sector in
economic development. The size of MSME’s contribution to GDP has continued. It
makes increasing government focus to MSMEs, including MSMEs in the fisheries
industry. Factors which concern are the financial managerial capabilities of MSMEs,
especially in presentation of financial statements. This research is aimed to observe
the readiness of MSMEs of fishery industry in adopting financial reporting system
using biological asset approach.
The study was conducted on eight districts of the city located in coastal areas and
mainland Riau Province. 259 respondents from farming aquaculture households
were tested to examine the readiness of MSME in preparing financial statements
using biological asset approach. The result of the research shows that from 100% of
respondents only 86% do financial recording and only 32% of them who prepared
the financial statements. But all respondents are not familiar with the concept of
biological assets. So we can conclude that the ability of human resources and
understanding of the needs of financial statements are caused difficulty to apply the
financial report system. Therefore, the application of financial statements with a
new biological asset approach can be done if both factors are corrected. This
research also show how to appied biological asset in fishery industry.
Keywords : biological asset, MSME; fishery industry; financial reporting

DETERMINANT FACTORS THAT INFLUENCE
THE DEMAND OF SOCIAL HEALTH INSURANCE IN SURAKARTA ON 2017
Nurul Istiqomah, Anggia Desty Rahmasari

Faculty of Economics and Business, Universitas Sebelas Maret
ABSTRACT
Health for an individual is an investment and human rights, so that with the
increasing degree of public health it can help realize the success of a country's
development. Every individual has the potential to experience severe / chronic
illness, get old, and retire and have no income in the long term. The public usually
has not thought about ownership insurance is mainly health insurance, possibly due
to expensive insurance fees or do not yet understand the benefits of health
insurance. This study aims to provide an overview about the influence of income,
education, jobs, gender, age, marital status and hospital sheet against ownership of
health insurance in Surakarta City on 2017. Data analysis that used in this study is
logistic regression analysis and this study using primary data that using simple
random sampling method with 100 person’s respondents.
The results showed that the variables of income, job and age have significant effect
to ownership of health insurance in Surakarta City on 2017. While for education,
gender, marital status, and hospital sheet variables are not significant ownership of
health insurance in Surakarta City on 2017. Recommendation from this study are
the organizers of social health insurance should conduct a socialization about BPJS
programs intensively and periodically, and also the health facilitator should
improve their health service and should not differentiate between BPJS participant
and non-BPJS participant. Society also expected to have social health insurance,
because it important for their future health assurance.
Keywords : age; income; job; logistic regression; social health insurance

RESEARCH CULTURE AND RESEARCH PRODUCTIVITY
Raden Lestari Garnasih

Faculty of Economics and Business, University of Riau, Pekanbaru, Indonesia
ABSTRACT
This research has aims to investigate relation between research culture and
research productivity. Faculty research productivity increasing is an issue that is
very important for improving the quality of a university.Variables become
determinant of research productivity is already done by previous researchers, but
the study of organizational culture generally is limited to qualitative research and
culture variables that determines the productivity of the research conducted so far
is limited to the culture of the organization. While on this paper culture is specific to
the culture of research. Data were collected from the respondent (N= 270) and was
analyzed with quantitative analysis. Dimensions of research culture consists eight
dimensions and two dimensions for research productivity. Using SEM, results this
research revealed that research culture influence to research productivity, and from
eight dimensions, were institutional research and agenda, departmental culture and
work condition, budget for research, resources, collaboration with and access to
research professional in other institutions, policies and guidelines on research
benefits and incentives, transparency and fairness of research policy and research
value, research value dimension has highest contribution to research culture and
policy research agenda dimension has lowest contribution. Meanwhile, quantity
dimension of research productivity has higher contribution to research productivity
than quality dimension. This result suggested that research culture in higher
education is very important to be developed and nurtured effectively to enhance
research productivity. Future research was suggested to added others variables that
effect to research productivity. Decentralised organisation, leadership, research
competence, research skill, individual characteristic, personality, job loading, time
to research, and research self-efficacy variables can be used to investigate to
research productivity.
Keywords : research culture; research productivity; higher education

ASSESSING THE POTENTIAL IMPACT OF THE RURAL ACT
IMPLEMENTATION ON INDONESIAN ECONOMY: FINANCIAL – SAM APPROACH
Nirwan Maulana1 & Heriyaldi2

1 Researcher, Center for Economics and Development Studies (CEDS), Universitas
Padjadjaran, West Java – Indonesia Jalan Cimandiri No. 6 | +6285659232432 |

nirwan.maulanaa@gmail.com
2 Researcher, Center for Economics and Development Studies (CEDS), Universitas
Padjadjaran, West Java – Indonesia Jalan Cimandiri No. 6 | +628121027037 |

heriyaldi@fe.unpad.ac.id
ABSTRACT
Rural Act is one of Indonesia’s policies in order to enhance economy activities on

village level. In addition, this act will be able to support inclusive growth particularly
on rural level. The spirit of the rural act is the allocation of funds from the national
budget to rural governments, which is calculated based on the number of villages
and allocated by taking into account population, poverty and geographic area. This
paper measured the potential impacts of rural act implementation to the economy,
using Financial Social Accounting Matrix (F-SAM) approach through 3 scenarios and
2 conditions which have been developed. This study utilizes F-SAM 2005, which is
the only dataset available in Indonesia. The critical results were implementation of
the rural act implementation through non-banking financial institutions (NBFI)
influences rural poor households positively; meanwhile banking institution
provided greater impacts to urban non-poor households as well as to the whole
economic activities in the aggregate levels. It could be an alternative policy to reduce
poverty, especially in rural areas.
Keywords : Financial Social Accounting Matrix (F-SAM); the rural act; rural poor
households
JEL Code : C67, D57, R15

THE EFFECTS OF CORPORATE SOCIAL RESPONSIBILITY, GOOD CORPORATE
GOVERNANCE AND INVESTMENT OPPORTUNITY SET ON FIRM
PERFORMANCE AND COST OF DEBT
Ahmad Fauzan Fathoni

Department of Management, Faculty of Economics and Business, Riau University
ahmadfauzanfathoni@lecturer.unri.ac.id
ABSTRACT
This study was motivated by many inconsistencies of previous research and the lack
of related research conducted on the mining sector. This study aimed to analyze the
influence of corporate social responsibility, good corporate governance and
investment opportunity set on the cost of debt with firm performance as an
intervening variable. Path analysis was used to analyze data. Using 26 sample of
mining firms listed in Indonesia Stock Exchange start from 2010 to 2015, the result
showed that corporate social responsibility, good corporate governance and
investment opportunity set had negative but not significant effect on cost of debt. In
addition, corporate social responsibility and good corporate governance positively
affected but not significant toward cost of debt. Conversely, investment opportunity
set positively and significantly affected on firm performance. This study also found
that firm performance did not intervene the influences of corporate social
responsibility, good corporate governance and investment opportunity set on cost
of debt.
Keywords : corporate social responsibility; good corporate governance;

investment opportunity set; firm performance; cost of debt

ANALYSIS OF FACTORS AFFECT THE QUALITY OF
BENGKALIS REGENCY GOVERNMENT FINANCIAL STATEMENTS
Julita and Susilatri

Faculty of Economics and Business, Riau University
ABSTRACT
This study aims to determine the effect of Quality of Human Resources, Internal
Control, Technology Utilization and Application of SAP to the Quality of Financial
Statements at Bengkalis Regency Government.
The dependent variable in this study is the Quality of Financial Statements, while
the independent variables are Quality of Human Resource, Internal Control,
Technology Utilization and Application of SAP. The population in this research is 81
SKPD at Bengkalis Regency Government. The sampling technique is determined by
purposive sampling. Data collection technique is by distributing questionnaires.
Data analysis was done with multiple linear regression model with SPSS version
20.00 software.
The results of this study indicate that the Quality of Human Resources, Internal
Control, and Utilization Technology affects the Quality of Bengkalis Regency
Government Financial Statements. While the SAP Application has no effect on the
Quality of Bengkalis Regency Government Financial Statements. The result of the
determination coefficient (adjusted R2) test is 0.889. This shows that the Quality of
Financial Statement at SKPD of Bengkalis Regency Government is influenced by the
research factor is 88,9%. While 11.1% is influenced by other factors not observed in
this research.
Keywords: quality of financial statements; quality of human resources; internal

control; technology utilization; application of SAP

ANALYSIS OF SYARI’AH FINANCING IN INDONESIA
Siti Aisyah Tri Rahayu*1, Tri Mulyaningsih1, Malik Cahyadin1

aisyahrahayu@yahoo.com; trimulyaningsih.uns@gmail.com;
malikcahyadin@gmail.com
1Universitas Sebelas Maret
ABSTRACT
The syari’ah banking industry is expanding and still has the potential to continue to
reach the optimum point. Until now, the growth of syari'ah banking still continues.
The number of Syari'ah Banks grew to 13 and the Syari'ah Business Unit was 21 uit
and there were 167 Syari'ah People's Financing Banks. The community is very
hopeful that there will be an increase in the performance of syari’ah banking in
order to contribute more in the national economy, especially in terms of financing
the real sector. This study aims to see the characteristics of financing in Indonesia's
syari’ah banking.
Is the financing that has been done by syari’ah banking is optimal. The data used are
panel data of 20 syari’ah banks during the period 2007 to 2014. This research uses
equations of panel data regression model. The analysis used is descriptive and
quantitative. The implication is that syari’ah banking still has to keep improving its
performance especially in syari'ah financing.
Keywords: syari’ah bank; syari'ah financing; data panel

FISHERMAN EMPOWERING MODEL IN ONE STOP BAHARI
TOURISM IN THE BEACH OF KLAYAR AND TAMPERAN BEACH
DISTRICT OF PACITAN
Dewi Ismoyowati1* ,Nurul Istiqomah2*, Izza Mafruhah3

1eyzamom@gmail.com; 2nurulistiqomah1980@yahoo.com;
3izza_wisnu@yahoo.com
*Faculty of Economics and Business, Universitas Sebelas Maret
ABSTRACT
Pacitan is one of the districts in East Java that has uniqueness because the region
consists of mountains, lowlands and coastal areas. The potency of coastal, coastal
and beaches is very beautiful because Pacitan began to develop coastal tourism as
one of the flagship. The contribution of nature tourism especially coastal to PAD
shows significant value. Selection of Klayar Beach is due to the large number of
tourists and the contribution of 156,655 visitors and the contribution of retribution
amounting to Rp 433,394,400. Although this value is still less compared to Teleng
Ria Beach, but Telengria beach is not selected because most have been managed by
private parties so that the opportunity for the fishermen to play a relatively small
role. Then the selection of Tamperan beach as the research locus is due to the large
contribution of TPI levy which shows the amount of catch value obtained on this TPI.
The general purpose of this research is to formulate the model of fishermen
community empowerment in One Stop Maritime Tourism in Klayar Beach and Beach
Tamperan district Pacitan. Analytical Hierarchy Process (AHP) is a method used to
solve complex problems into groups in a hierarchical way to analyze the factors that
influence the improvement of fisherman's economy in Klayar and Tamperan beach
areas. Geographic Information System (GIS) is also required to illustrate the
potential of coastal resource-based economic resources in the coastal areas of
Klayar and Tamperan beaches of Pacitan district supported by mapping.
Based on the results of the interviews, it was found that the fisherman community
empowerment model started with the opportunity of developing marine
aquaculture business and non-fishery as an effort to overcome dependence on
nature, reduce risk and also increase business continuity and income. The next step
is to develop small industry based on fishery so that fish is not only sold as raw
material but already in processed form so it is more durable and has added value
(value added) higher.
Keywords : Pacitan; fisherman; AHP; tourism

LEADING SECTORS ANALYSIS OF RIAU PROVINCE AFTER DECREASING
CRUDE OIL PRICE BASED ON PDRB (GROSS DOMESTIC REGIONAL PRODUCT)
SNA 2008
Anthony Mayes
Economic Development, Faculty of Economics and Business, Riau University
ABSTRACT
The last few years some commodities have descreasing in price in the International
market. This price reduction has a very significant impact on the economy of Riau
Province. That commodities experienced a very drastic price decline, namely world
crude oil price and agricultural commodities, especially CPO and processed rubber
prices in the international market.
This study aims to identify the leading sectors that drive economic and the
identification of the main sector of the Riau Province economy driving based on
PDRB (Gross Domestic Regional Product) SNA 2008 and identified the leading
sectors that can be a mainstay driving the economy or Riau Province after the
decline in petroleum prices.
Based on the analysis by using Location Quation and Klassen Typology obtained the
results among the leading : Sectors that can be relied upon as the sector driving the
economy of Riau Province during the analysis years 2011-2015 is the mining and
quarrying sector, agriculture, livestock, hunting and agricultural services. The Food
and beverage industry sub-sector is a leading sub-sector, food industry can be used
as a mainstay of the sector propulsion for other sector in Riau Province. The
advanced and growing sector is the manufacturing sector. In other words, in Riau
Province the processing industry sector has a performance of economic growth rate
and bigger share compared with national condition as a whole. Based on the analysis
of Klassen typology in the Province of Riau there are potential categorized sectord
are the agriculture, forestry and fisheries sector as well as the mining and quarrying
sector. Sectors that are booming. Sectors in the develoving category include :
Electricity and gas procurement, real estate, corporate service, health services and
social activities and other services. Electricity and gass procurement sectors, water
supply, waste treatment, waste and recycling, construction, large and retail trade,
car and motorcyle repairs, transportation and struggle, accommodation and
drinking, information and communication, financial and insurances services,
government, defence and compulsory social security, education services, are
classified as relative lagging sectors.
Keywords: leading sectors, Riau Province, GDRP

STUDY OF RURAL HOUSEHOLD SAVINGS BEHAVIOUR
IN NORTH SULAWESI : A PATH ANALYSIS APPROACH
Tri Oldy Rotinsulu*, George M.V. Kawung, Krest Donald Tolosang

*email: o_rotinsulu@yahoo.com
Faculty of Economics and Business Sam Ratulangi University – Indonesia
ABSTRACT
This study aims : (1). To determine the magnitude of the effect of
educational level, lenght of work, total dependants, access to credit on household
savings both directly and indirectly (2), To determine the magnitude of the effect of
temporary income, permanent income on household savings both directly and
indirectly.
This study uses primary data in the form of a cross section located in North
Sulawesi by taking five samples of rural areas : Minahasa District, North Minahasa
District, South Minahasa District, Bolaang Mongondow District and Siau-
Tagulandang-Biaro District. The respondent is the head of household and / or
housewife who is educated at least junior high school or equal. Respondent's work
covers 3 main categories: (1) Civil Servant / teacher / TNI-POLRI; (2) small and
medium entrepreneurs; (3) farmers / fishermen selected purposively. The analysis
methods used in this study are descriptive analysis and structural equation
modeling (SEM).
The results of this study indicate: (1). Levels of education has no positive
effect both directly or indirectly to the household savings but has positive influence
directly and indirectlyt to temporary income, (2). Length of work has a positive
direct effect on temporary income, but it has no direct effect to household savings.
(3). Number of dependants only direct positive effect on household savings (4).
Acces to credit only direct effect to household savings and permanent income. (6)
Temporary Income and Permanent income has a direct positive effect on
households saving bahaviour.
Keywords: household savings; level of education; length of work;

total dependants; access to credit; temporary income; permanent
income

THE INDEX OF HUMAN DEVELOPMENT ON POVERTY
IN RIAU PROVINCE 2010-2015 BASED ON GENDER CONCEPTION
Rahmita Budiartiningsih, Diniati, Lapeti Sari

Faculty of Economics, Riau University, Pekanbaru, Indonesia
ABSTRACT
This study aims to see the effect of Human Development Index (HDI) on poverty in
Riau Province 2010-2015 based on gender differences. This study aims to see how
the factors that make up HDI health, education and income associated with
increasing and decreasing poverty levels in Province Riau based on differences
Gender. Analysis method used in this research is descriptive analiysis, The data used
in this study is secondary data obtained from the Badan Pusat Statistik indonesia.
The results showed that education, health and income of men and women should
play and active role in reducing poverty in Province Riau. Education is illustrated by
literacy rates that are above 90% both men and women and the average length of
school is equivalent to grade 2 Junior High School. The health seen from life
expectancy indicates that women's health is higher with Life expectancy of 73 years
while the life expectancy of men is 69 years old than men, while income seen from
per capita expenditure shows that men's expenditure is higher than women, often
poverty Faced women, because women suffer most in the same poverty situation
when compared to men. Improve the social and economic status of women, and
increase the distribution of income for low-income groups in order to reduce
poverty, and then enjoy the benefits of economic growth equally by the entire
population.
Keywords : literacy rate; average school duration; life expectancy; infant

mortality; mortality; income; poverty

EVALUATION MODEL MINIMUM SERVICE STANDARDS PACITAN PUBLIC
SCHOOL IN PROVIDING PUBLIC SECTOR SERVICE TO THE SOCIETY IN THE
REGION PACITAN, EAST JAVA
Riwi Sumantyo, Tetuko Rawidyo Putro, Johadi

Department of Economics and Business, Universitas Sebelas Maret
ABSTRACT
Education is the human right of every human being in the world so that education
must be accessible to all mankind, without any form of discrimination. All children
should be able to go to school, and therefore benefit from the same opportunities to
build the future with the other. Improving the quality of public services undertaken
by the local government, especially in the basic education sector to the society in the
local region such as Pacitan district in east Java, becomes one of the important
discussion topics that must be analyzed to provide good public services to the
society, especially in Pacitan region. This is based on the facts that occur in the local
society that is with the increasing demands of society to get a standard of public
services more quickly, friendly and good service.
This study aims to develop a model of public service quality evaluation in the
education sector. The education sector is a vital sector in determining the quality of
the generation and the future of a nation. The method used in this research is
mystery shopping through Focus Group Discussion with related parties, namely
local government in the field of education, teachers, principals, and students.
The results of this study are expected to be a reference performance of public sector
services by local governments Pacitan to the society, especially in the education
sector so that good public services can be a comprehensive policy in formulating
appropriate public policy, especially in the elementary education sector in public
primary schools in the region of Pacitan, East Java.
Keywords : quality public services; Pacitan District; basic education; local

government

ANALYSIS OF PROVINCIAL FISCAL CAPACITY ON MANDATORY AFFAIRS IN
EFFORTS TO INCREASE REGIONAL COMPETITIVENESS AND ECONOMIC
GROWTH IN RIAU PROVINCE
B. Isyandi
Faculty of Economics, University of Riau
ABSTRACT
This study aims to analyze the fiscal capacity of regions to increase regional
competitiveness and economic growth in Riau Province. Existing data indicates that
in some regions the DAU's role is significant because local expenditure policies are
dominated by the number of DAUs compared to PAD. Any DAU transfers received
by the regions will be devoted to local government expenditures, so it is not
uncommon for local governments to set pessimistic local plans and spending plans
tend to be optimistic that DAU transfers can be received by larger regions.
Development activities in Riau Province in 2015 have not prioritized mandatory
affairs in direct expenditure which is the right of the community. The realization of
compulsory spending is for educational affairs only 59.23 percent, health
compulsory only 61.84 percent and environmental obligatory affairs only 48.85
percent, as well as compulsory public works only 50.97 percent.
This research will be conducted in Riau Province, which includes city districts with
regional / national scale sectoral development activities as well as surveys to
hinterland districts / municipalities within Riau Province. The variables measured
in this study are the variables needed to assess the determinants of regional fiscal
capacity. Quantitative-qualitative analysis is done through primary and secondary
data obtained. Based on the analysis, it is then formulated into regional revenue and
expenditure that describes the space of fiscal capacity and regional independence.
The results of this study will find the formula of regional fiscal capacity for
increasing competitiveness and economic growth in Riau Province. Low budget
absorption of mandatory affairs greatly affects the quality of life of the community.
This low budget absorption is not a reasonable austerity measure.
Keywords : fiscal capacity; local competitiveness; economic growth

PRODUCTIVITY EFFECT OF ORANGE FARMING TO FARMERS’S INCOME IN
KAMPAR REGENCY
Rita Yani Iyan, Any Widayatsari, Sally Oki Mahyona
ABSTRACT
This research aims to find out the productivity effect of orange farming to farmers’s
income in Kampar Regency. The selection of research location is choosen by
purposive. By using simple random sampling method, it obtained 165 respondents.
This research used the descriptive method and quantitative analysis. This research
used the multiple linear regression analysis. The result of this research shows that
the variable land area, labour, price and production simultaneously significant effect
the farmer’s income in Kampar Regency of 3146,379 with a significant level of 0,000.
Partially variable of labor, price, production have positive effect and significant
effect to the farmer’s income with each value that is 2,252 , 13,020 and 60,189. While
the variable land area has a negative effect and not significant effect is -1,452.
Keywords : land area; labour; price

IMPLEMENTATION OF CIPPO MODEL (CONTEXT, INPUT, PROCESS, OUTPUT,
AND OUTCOME) IN POVERTY REDUCTION EFFORTS BASED ON MAIN
POTENTIAL IN WONOGIRI REGENCY
Supriyonoa, Izza Mafruhahb, Nurul Istiqomahc

a Department of Economic Development, Faculty of Economics and Business
Sebelas Maret University, Surakarta, Indonesia
izza_wisnu@yahoo.com
b a Department of Economic Development, Faculty of Economics and Business
Sebelas Maret University, Surakarta, Indonesia

nurulistiqomah1980@yahoo.com
c Center for Regional Policy and institutional Studies, Institute for Research and
Community Service, Sebelas Maret University, Indonesia

Surakarta, Indonesia
ABSTRACT
The main objective of this research is to develop a model of poverty reduction based
on main potentials through the implementation of CIPOO (Context, Input, Process,
Output and Outcome) model in Wonogiri. Specifically, this study aims to (1) identify
the local resource-based economic potentials of Wonogiri using the CIPPO model,
(2) analyze the factors affecting the improvement of empowerment and community
participation in inclusive development activities in Wonogiri, (3) analyze the
development process of each sub-district in Wonogiri.
This research uses Sequential Mixed Method and the analysis tools used include
Geographic Information System (GIS), CIPOO, Focus Group Discussion and in-depth
interview, and Klassen Typology.
The results indicate that the greatest potential in Wonogiri regency is agriculture
especially horticulture, fishery, plantation and livestock husbandry followed by
tourism. It is found also that the gap among sub-districts in Wonogiri Regency is
fairly high, as indicated by the high Gini Index Ratio and Klassen typology. Therefore,
the poverty reduction model using CIPPO is deemed appropriate for Wonogiri.
Keywords : poverty; community empowerment; main potential; CIPOO

SEVERAL VARIABLES CORRELATING TO
ECONOMIC CONDITIONS OF THE POOR POPULATION IN BALI PROVINCE
A A I N Marhaeni and Ni Nyoman Yuliarmi
ABSTRACT
Until now the problem of poverty remains a very interesting issue, as well as
this problem persists even though various poverty alleviation programs have been
done, also because this issue can be said to be a matter of global concern, not only in
developing countries, also in developed countries. Various approaches have been
done so far in assessing the problem of poverty that more nuanced economy. In this
study although the approach used is more likely to approach the economy in
assessing poverty, yet there is one variable included in the study is about poor
culture. The view that poverty is a destiny that must be accepted, will be very
difficult for them to get out of the problem of poverty. Thus a more comprehensive
approach is needed in assessing poverty.
The objectives of this research i.e.: 1) To assess the economic opportunities
owned by the poor in Bali Province; 2) Assessing the availability of infrastructure
owned by the poor in Bali Province; 3) Analyze the role of economic opportunities,
infrastructure, demographic conditions, culture, and capital accumulation on the
economic conditions of the poor in Bali Province. The research location is in all
regencies/cities in Bali Province, with 231 respondents. Sampling technique to be
used is non probability sampling that is accidental sampling, and snowball sampling
for respondent, and purposive sampling technique for informant, with data
collection method of interview and indepth interview. Statistical data analysis
techniques that will be used there are 2 ie descriptive statistics, and inferential
statistics in the form of Path Analysis.
The results shows that: 1) economic opportunities (land ownership, skills,
employment opportunities elsewhere) owned by the poor in this research area are
relatively low in terms of those variables; 2) Availability of infrastructure
(availability of roads, markets, water and electricity facilities, and health facilities)
in the area of research is sufficient to potentially improve the economic conditions
of the poor; 3) Cultural variables that are positive and capital accumulation have a
significant positive effect on the economic condition of the poor. Other variables
such as economic opportunities, availability of infrastructure, and demographic
variables have no significant effect on the economic condition of the poor. Further
analysis also shows the role of capital accumulation is very important in improving
the economic conditions of the poor both directly and in their role as intervening
variables. Positive cultural variables such as not assuming poverty as destiny, being
able to get out, being unhappy with the condition of poverty can be their driving
force to improve their economic condition so that it can get out of poverty.
Keywords : poverty; infrastructure; capital accumulation; culture; economic

opportunity

ANALYSIS OF THE EFFECT OF HUMAN DEVELOPMENT TO ECONOMIC
GROWTH IN RIAU PROVINCE
Any Widayatsari, John Viter, and Syapsan

Faculty of Economics & Business, Universitas Riau, Pekanbaru, Indonesia
ABSTRACT
This research aims to determine the effect of literacy rate, mean years of schooling
and life expectancy to the economic growth at five regions in Riau Province. The
method of analysis of this research is quantitative-descriptive, using panel data
regression analysis for data period of 2004-2013. The object of this research is 5 of
12 regions in Riau Province which have higher economic growth relative to the
others,these regions are Bengkalis, Indragiri Hilir, Siak, Pekanbaru and Dumai. The
result from this research shows that literacy rate and life expectancy have positive
and significant effect on economic growth, while mean years of schooling hasn’t
significant effect on the economic growth in five regions in Riau Province during
2004-2013. Simultaneously, literacy rate, mean years of schooling and life
expectancy significant effect on the economic growth. This research also shows that
the regions which are received most benefit from human development are
Pekanbaru, Bengkalis and Dumai. While human development in Indragiri Hilir and
Siak less beneficial to economic growth because the economy of those regions
dominated by the agricultural sector, that is palm oil commodity. Both regions have
a sector basis in the agricultural sector, hence economic growth slowed down in
Indragiri Hilir and Siak in 2009-2013. The drop in palm oil prices caused by the
subprime mortgage crisis in early 2009.
Keywords : literacy rate; mean years of schooling; life expectancy; human

development; economic growth

THE EFFECTIVENESS OF FISCAL AND MONETARY
POLICY ON OUTPUT AND PRICE IN INDONESIA
Alpon Satrianto*1, Syafruddin Karimi2, Indrawari2, Werry Darta Taifur2

*1Universitas Negeri Padang
2Universitas Andalas
ABSTRACT
This study is based on the long debate that occurs among economists about the
effectiveness of fiscal and monetary policy on the output of a country. Some
economists argue that fiscal policy is more effective against the output of a country
while others argue that monetary policy is more effective. However, the economist's
debate only sees the effectiveness of fiscal and monetary policy on output. No such
economist sees the effectiveness of fiscal and monetary policy on other
macroeconomic variables such as prices. Therefore, this study contributes to
analyzing the most effective policies on output and prices in Indonesia.
This study uses time series data from 1970-2015. Fiscal policy data is measured
from real government expenditure, monetary policy is measured from real money
supply, output is measured from real GDP and price is measured from Consumer
Price Index (CPI). Data analysis techniques use Vector Auto Regressive (VAR),
Impulse Response Function (IRF) and Forecast Error Variance Decomposition
(FEVD). A policy is said to be effective if the FEVD method shocks one policy against
output variability and the price is greatest compared to other policies.
The results conclude that fiscal policy is more effective on output and prices than
monetary policy. This is evident from the shock of fiscal policy based on FEVD
method is the most important role to the variability of output and price in Indonesia
when compared with monetary policy. With the word meaning, fiscal policy has a
big role to the changes that occur in the output and prices in Indonesia.
Keywords : fiscal; monetary; output; price

DEINDUSTRIALIZATION PHENOMENON IN RIAU PROVINCE AND SUMATERA
Darmayuda1, M. Hasnan2, Hera Lusiana2, Neti Marika3, Prayudi Ibrahim

Nasution2
1Lecturer, Economic Development, Faculty of Economics and Business, Riau
University
2Student, Economic Development, Faculty of Economics and Business, Riau
University
3Student, Management, Faculty of Economics and Business, Riau University
ABSTRACT
The decrease contribution of manufacture sector to GDP as known

deindustrialization is a phenomenon that happened start from 2000 in Indonesia.
Deindustrialization phenomenon has effect to decrease contribution of manufacture
sector, weaken of GDP, low absorbtion of labor, increase import and unemployee.
Nandra Ali Akbar (2016) said that GDP, export trade balance and unemployee have
significant influence to deindustrialization process.The purpose of research is to
analyze of deindustrialization phenomenon in Riau Province and 3 provinces in
Sumatera that have biggest economic scale is Nanggroe Aceh Darussalam, North
Sumatera, and South Sumatera. This research used secondary data from BPS start
from 2012- 2016. The method used was quantitative method with trand analyze.
Trand analyze is analyze method to make estimation or forecast something in the
future, long term movement that have prefer to one side.
Result of research from 2012 – 2016 in Riau Province, Nanggroe Aceh Darussalam,
North Sumatera and South Sumatera occurred deindustrialization phenomenon that
happened decrease growth and contribution manufacture sector to GDP year by
year. But in one side, South Sumatera’s growth happened increase from 4 %
becomes 6 % in 2016. The bad of deindustrialization phenomenon happened in
Nanggroe Aceh Darussalam with negative growth as long as 5 years. Result of trend
analyze until 2021, the growth of industry sector in Riau and North Sumatera keep
on decrease become 0,098 % and 1,158 %. While the growth of industry sector in
South Sumatera Province keep on increase until 2021 become 6,66%. Because of
that, the solution was to stop deindustrialization phenomenon by the district
government as soon to make industrialization regulation in resources base, so the
growth of industry sector always sustainable.
Keywords : deindustrialization; manufacture industry; industrialization; GDP

The role of higher education in producing young enterprises
Ahmad Mardalis1, Fauzan1, Imron Rosyadi1

E-mail: Ahmad.Mardalis@ums.ac.id; Fauzan@ums.ac.id; Imron.Rosyadi@ums.ac.id
1Department of Management, Faculty of Economics, University of Muhammadiyah
Surakarta, Indonesia
ABSTRACT
The purpose of this research was to formulate the strategic role of universities in
the development of micro and small enterprises managed by students. Respondents
are students from three major universities in Surakarta, that is, Sebelas Maret State
University (UNS), Muhammadiyah University of Surakarta (UMS), and State Islamic
Institute of Surakarta (IAIN) Surakarta. This study uses primary data obtained
through field observation techniques, focus group discussions (FGD) and in-depth
interviews with the authorities in universities who are considered key figures in the
field of student affairs. To analyze the data used descriptive-analytic approach. The
results of this study indicated the importance of the active role of universities to
develop micro and small businesses owned by students through various
approaches. Firstly, entrepreneurship teaching and soft skill about business
management with intensive, systematic and integrated training based on science
and technology. The higher education institution provides adequate laboratories to
hone student’s skills in developing business plan and explaining future business
prospects (prospectus); Secondly, universities work together with banks and HIPMI
for the purpose of business feasibility evaluation, business assistance, and business
consultant for students of business actors; and Thirdly, providing easy access to
obtain capital for student entrepreneurs whose business plan is considered feasible
by the assessment team. The capital given to the student is not grant, but it is a loan
and revolving fund with a mudharabah contract that is a business cooperation
agreement between two parties where the first party (shahibul maal) provides all
(100 percent) of capital, while the other party as a manager. These steps are
believed to form entrepreneurs’ students.
Keywords : business strategy; micro and small enterprises; entrepreneurships

DOES SOCIAL ORIENTATION MICROFINANCES (MFI’S) FIT FOR SUBSISTENCE
MICRO AND SMALL ENTERPRISES? A CASE STUDY SOCIAL CAPITAL BASED
MFIS IN SURAKARTA
Hery Sulistio Jati Nugroho Sriwiyanto1

Akhmad Daerobi2
1Researcher, Kemitraan and Lecturer, Faculty of Economics & Business,
Universitas Sebelas Maret

2Lecturer, Faculty of Economics & Business, Universitas Sebelas Maret
ABSTRACT
The aim of this paper is to contribute an alternative model of financial inclusion for
the poorest people in Indonesia. By focusing on social capital based MFis in
Surakarta, the scope of financial inclusion in this study covers financial sector
activity particularly in credit side. Action research approach with non-participant
observation method is used in this paper. Socioeconomic factors, expenditure
patterns and borrower behavior were observed during research period. Research
shows that subsistence Micro and Small Enterprises (MSE’s) are owned mostly by
low-income residents. This study found that they are vulnerable to economic shocks
in fulfilling their daily needs. It also affects their ability to pay the credit payment.
Most low-income residents have many dependents, less educated and work in
sectors with high-risk product characteristics (loss). These characteristic
differences have consequences for different needs and utilization of funds. This
study illustrates that the characteristics of low-income communities that require
assistance, should be provided by Microfinance Institutions (MFIs) with a social
orientation rather than focusing on the sustainability aspects of finance (financial
sustainability). Therefore, a strategy that implements Law No.2013 still questioned.
Transforming SMEs from micro to higher levels is embedded in their transformation
in accessing MFIs from socially oriented to MFIs in accordance with the
Microfinance law.

AN ANALYSIS OF COMPLIANCE
TAXPAYERS RESTAURANT AS THE POTENTIAL LOCAL REVENUE
Zirman, Nur Azlina, and Restu Agusti
ABSTRACT
The purpose of this research is to find out the effect of understanding the rules,
turnover, sanctions, social relations, the influence of turnover, the moral obligations,
the publicity of restaurant tax and the service quality of local revenue office against
tax compliance.Population to research it is a whole tax payers from restaurant listed
on department of local revenue the city of Pekanbaru and Bengkalis until the end of
2016, amounted to 2.605. The sampling technique in this research isproportionate
stratified random sampling and the sample was 160. In Pekanbaru obtain 58
restaurants, 31 restaurant café/coffee shop, 20 canteens and 1 catering. Meanwhile
in Bengkalis, obtain 41 coffee shop, 12 restaurant, 8 café, 4 stall, 2 bakery, and 2
catering. The technique of collecting data used was primary data obtained from
questionnaires. Data analysis conducted with multiple regression model with help
of software SPSS version 21,0. The results showed that knowledge of that
understanding the rule, social relations, the moral obligations, the publicity of
restaurant, the service quality of local revenue office tax influenced on tax
compliance. Meanwhile turnover and sanctions didn’t influence tax compliance. The
test results obtained R2 values of 0,506. Which means of variabels that affect tax
compliance restaurant in Pekanbaru and Bengkalis could be explained inside the
model 50,6% while the remaining 49,4% is explained by variables outside the
model.
Keywords : understanding the rules, turnover, sanctions, social relations, moral

obligations, publicity of restaurant tax, service quality of local revenue
office; tax compliance

OPTIMIZATION OF ZAKAT FUND IN BAZNAS PEKANBARU
Eka Armas Pailis*

*Faculty of Economics and Business, Universitas Riau
eka.armas@lecturer.unri.ac.id
ABSTRACT
This research is the problem of the distribution of zakat funds sourced from various
elements, individual muzaki and muzaki entity in Pekanbaru and the performance
of the amyl in Baznas Pekanbaru City. Shows the phenomenon of not yet optimal
allocation of zakat funds on each party entitled to get it. Especially from the
mustahik poor people spread into education, health, social and economic. Almost
40% of the funds at Baznas Pekanbaru are channeled for amil and operational
purposes. While the allocation for the poor is still relatively low. Using descriptive
research with secondary data sourced from Baznas Pekanbaru annual financial
statements and data analyzed by using descriptive statistic. The results showed that
the provision of zakat funds in baznas pekanbaru not optimal. To make the optimal
management of zakat funds in order to alleviate the poor need to be more
proportional to the allocation of amil and operational funds to be reduced and
allocated to the allotment of the poor.
Keywords : optimization of zakat fund, BAZNAS Pekanbaru

BAD AND GOOD NEWS :
HOAX ASESSMENT MODEL FOR STARTUP INNOVATION
Fatkhurahman*
*Lecturer, Faculty of Economics, Universitas Lancang Kuning
fatkhurrahman@unilak.ac.id
ABSTRACT
Development of entrepreneurial spirit requires the ability to take decisions in the

face of various risks. Where in taking the decision is needed information and the
ability to get the right information. One source of information is social media and
again the current trend. However, the problem of the tendency of weaknesses in
filtering news capabilities has caused the need for a solution to overcome the
problem. Assessing the ability to assess the truth of a news from students is very
useful in assessing the entrepreneurial spirit of students in making entrepreneurial
decisions. The theory used in this study adopted AJI's opinion in Pakpahan (2017)
which says the ability to judge a story can be seen from: title assessment, site
assessment, contents, photo and news sources. The research method used in this
study is a survey, to students of management courses last semester who have taken
entrepreneurship subjects 1 and 2 which amounted to 350 people and samples
taken as many as 78 people. Data collection using questioner and data was analyzed
by using descriptive analysis. The results showed that the student still not able to
assess the truth of a news, so that the decision taken in increasing the courage to
take risks is still low.
Keywords : hoax assessment, news, start up innovation

SUPPLY CHAIN AND MARKETING OF POST-PRODUCTION RICE
IN BALI PROVINCE
Ni Nyoman Reni Suasih, Ni Nyoman Yuliarmi*

* Corresponding author
Faculty of Economics and Business, University of Udayana, Denpasar, Indonesia
ABSTRACT
Rice is a major staple food for Indonesians, and its production also provides
livelihood for million Indonesian farm households. But, rice farmer’s income in
Indonesia is remaining low. One of the reason is the price of postharvest rice is low
if compare with the production cost. The aim of this research is to analyze: (1) the
supply chain of postproduction rice; (2) marketing efficiency of postproduction rice;
and (3) the role of government to increase the efficiency of postproduction rice
marketing. The method used in this research is quantitative and qualitative analysis.
The results show that: (1) the supply chain of postproduction rice in Bali is still long
and the efficiency of marketing institution is yet; (2) marketing of postproduction
rice is efficiency yet; and (3) the role of government to increase the efficiency of
postproduction rice are regulating function, educating function; and also balancing
function.
Keywords : supply chain; marketing efficiency; marketing margin; producer

market expansion; elasticity of price transmission; structure-conduct-
performance

QUANTIFYING THE LOSS OF ECONOMIC VALUE IN ACUTE RESPIRATORY
INFECTIONS (ARI) DUE TO HAZE IN FOREST & LAND FIRES IN PEKANBARU,
RIAU
Ando Fahda Aulia1*, Petri Busmi Elda1, Tri Sukirno Putro1

1 Department of Economics, Faculty of Economics & Business, Universitas Riau
ABSTRACT
This study assesses the loss of economic value of the prevalence of Acute
Respiratory Infections (ARI) as a result from haze in great forest and land fires
occurred during July-December 2015 in Riau. The area sampled was in Rumbai
Pesisir Sub-district in Pekanbaru using purposive sampling to select 43
respondents, which was undertaken in June-July 2017. The analytical methods used
in this research were descriptive, to describe and explain the basis of the data
obtained in order to describe the situation and quantitative methods, to quantify the
economic losses sustained by using Cost of Illness (COI).
The results show that people living in Rumbai Pesisir suffered losses due to cost of
ARI caused by smog of forest and land fires. It is estimated that total value of
economic losses to the society in Rumbai Pesisir is Rp 312.041.535,-, comprising
losses due to loss of revenue during illness amounting for Rp 177.250.000,- and cost
of treatment accounting for Rp 134.791.535,-.
Keywords : Acute Respiratory Infections (ARI); haze; forest fires; Cost of Illness
(COI)

POLITIC ECONOMIC POWER OF THE PENGHULU KAMPONG AND
IMPLICATIONS ON THE LOCAL DEMOCRATIC CONSOLIDATION STRATEGY:
THE CASE OF TWO VILLAGES.
Dahlan Tampubolon, Khairul Anwar & Syofian Hadi
Universitas Riau, Pekanbaru

dahlantbolon@unri.ac.id
ABSTRACT
This research is a continuation of political research on the power of penghulu

kampung and their implications for the social conflict management strategy in 2016.
This studies done in Kampung Dosan and Maredan. The purpose of this study is to
analyze economic political power and its implications on the consolidation of local
democracy. At the level of the kampong government, there are major problems
facing the penghulu in the context of political power of the economy. The problem
is to democratize local political actors in the era of regional autonomy. Also raises
community issues in the kampong policy process. This is the entrance to the conflict
resolution of natural resources in two kampung. Before the reform era in Indonesia,
as well as the two kampongs, the pattern of government power was centered on the
kinship-based political institutions. In the Reformation era, the direction of power
patterns shifted to more open interests. Meanwhile, at the community level,
penghulu play a major role in encouraging group awareness. Awareness to use
plantation resources to improve farmers' processing efficiency and household
income.
Keywords: power of penghulu, social conflict management, and economic

political power


Indonesia Economic Policy in The Changing World

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INDONESIA ECONOMIC POLICY IN THE

Organized and Hosted by

JURUSAN ILMU EKONOMI

Organized and Hosted by :

The 2nd International Conference on Economic Development: Indonesia Economic Policy in

The abstracts and papers of International Conference on Economic Development are

On behalf of the conference organisers

The Factors That Influencing Learning Achievements In Introduction Accounting 1

Analysis of Business Efficiency of Agro-based Small and Medium Enterprises (SMEs) 16

Effects of Political Closeness And Capital Expenditure On Regional Economic Growth: 27

The Effect of Corporate Governance On Tax Avoidance (Empirical Studies On 38

Signaling of Private Information On Election 39

The Analysis of Preparedness of Coastal Fishing Industry In Adopting Biological 40

Determinant Factors That Influence The Demand of Social Health Insurance In 41

Research Culture and Research Productivity 42

Assessing The Potential Impact of The Rural Act Implementation On Indonesian 43

Analysis of Factors Affect The Quality of Bengkalis Regency Government Financial 45

Analysis of Syari’ah Financing In Indonesia 46

Study of Rural Household Savings Behaviour In North Sulawesi : A Path Analysis 49

The Index of Human Development On Poverty In Riau Province 2010-2015 Based On 50

Evaluation Model Minimum Service Standards Pacitan Public School In Providing 51

Analysis of Provincial Fiscal Capacity On Mandatory Affairs In Efforts To Increase 52

Productivity effect of orange farming to farmers’s income in Kampar Regency 53

Implementation of CIPPO Model (Context, Input, Process, Output, And Outcome) In 54

Several Variables Correlating To Economic Conditions Of The Poor Population in Bali 55

Deindustrialization Phenomenon In Riau Province and Sumatera 58

The Role of Higher Education In Producing Young Enterprises 59

An Analysis of Compliance Taxpayers Restaurant As The Potential Local Revenue 61

Optimization of Zakat Fund In BAZNAS Pekanbaru 62

Supply Chain And Marketing of Post-Production Rice In Bali Province 64

Rosmida and Suharyono

Abstract: This study is expected to provide an overview of the factors that

II. REVIEW OF LITERATURE

2.2 The Factors that Influencing Learning Achievement

III. RESEARCH METHODOLOGY

3.2 Models Used

Figure 3.1 Research model

Figure 3.1 Research Design

3.4 Data Collection and Data Analysis Techniques

Data analysis was done by using computer program, SPSS (statistical

IV. FINDINGS AND DISCUSSION

4.2 The Influence of Internal Factors on Learning Achievement Introduction

Internal factors such as intelengensi, attitude, interest, talent and

4.3 The Influence of External Factors on Learning Achievement of

4.4 The Influence of Teaching Quality on Learning Achievement Introduction

The vocational education curriculum which is laboratory based with 60%

V. CONCLISION AND SUGGESTION

1Andika Satya(*),1Budi Setiawan, 1Ilham Fadhilah Perdana

Abstract: This research explains alternative strategy of palm sugar product

(Indonesia Oil Palm Statistics 2015).

Meredan 2.032 1.860 109

Source: Tualang Sub-district in Figures 2016

MATERIALS AND METHODS

RESULTS AND DISCUSSION

Chart of Production Process

Trees which are felled during the re-

Juice that came out are collected

Nira yang telah bersih dari kotoran

Before molding, the boiled juice is

The final step is printing into SADIES

Evy Maharani1 and Yeni Kusumawaty 2*

1,2AgribusinessDepartment, Faculty of Agriculture, Universitas Riau

Abstract: Small and Medium Enterprises (SMEs) have a strategic role in