The Analysis Of Industrial Location Of Fish Processing Industries In Indonesia Between 2000 – 2004

Generally, industries choose to allocate their firms in specific locations which are conducive to increase their productivity and economic outputs. This paper is investigating three major points related to the development of fish processing industries in Indonesia. First, the analysis about the prominent role of East Java in allocating the fish processing industries and exporting fishery products compared to South Sulawesi. Second, the analysis about the concentration degree of fish processing industries in Indonesia and East Java, measured by Locational Gini Coefficients, and the analysis about their trends during 2000-2004. Third, the analysis about the factors which affect the industrial location of fish processing industries in Indonesia. Taking benefits from the position of being the gateway to eastern part of Indonesia since 9th century, East Java has improved its economic development and become one of the most important industrial bottom lines in Indonesia. The existence of industrial zones, transportation facilities, financial institutions, and increasing demand of fishery commodities from domestic markets are the factors which have encouraged the establishment of fish processing industries in and increased the fishery commodities exported from East Java. Furthermore, the paper concludes that the distribution of employment working on fish processing industries in national level were extremely unequal across provinces, whereas the distributions of total employment were moderately unequal across provinces from 2000 until 2004. Coexisted with this finding, the result from panel data regression exposes that the share of output from fishery sector, the average intensity of employment working on fish processing industries, and the availability of fishing ports are the significant factors affecting the concentration of fish processing industries in a certain province, which is in our model, represented by the share of employment working on these industries to the total national employment.