Analysis of Factors Affecting Output of Manufacturing Industry Sector in Central Java

Abstract

This study aims to analyze the influence of the District Minimum Wage, Labor, and Number of Business Units on the GRDP of the industrial sector in Central Java in 2014-2018. The data used is panel data consisting of time series data for 2014–2018 and cross-sections of 35 districts and cities in Central Java. The analytical tool used is panel data regression, namely the Fixed Effect Model (FEM). The results of the study show that the number of business units has a negative and significant effect on the GRDP of the industrial sector in region Central Java in 2014-2018. Meanwhile, labor force and city minimum wages have had a positive and significant effect on the GRDP of the industrial sector in Central Java in 2014-2018. With this research, it is hoped that the regional government will facilitate the process of managing a business license, because it will be encouraging entrepreneurs to
establishing industrial units. The number of industrial units will increase the volume of production and ultimately increase the GRDP of the manufacturing industry sector and will eventually absorb labor in the sector.