economy and has a value greater backward linkage than forward linkage value. Meanwhile, in Kencana 2011 research, it appears that the tourism sector needs
to get priority in its development because it has the highest value for the both multiplier analysis Output and Income. Thus the government of Jakarta is
expected to overcome the constraints caused by lack of budget allocation for tourism sector.
In general, studies on the linkage, dispersion and multiplier have an important role for a region. Study of the literature suggests that Input-Output
analysis has been widely used as a research tool. Recent research on the pulp and paper industry using Input-Output Table of Riau Province 2010 has not been done
yet.
2.6 Research Framework
Economic growth is the goal of regional and national development, including Riau Province in which social welfare can be increased rapidly through
the improvement of one or several key economic sectors. Pulp and paper industry as one of the manufacturing industry is a priority in Riau Province economy that
can have an impact on improving the welfare of society in development. Therefore, this study will discuss the role of pulp and paper industry in Riau
Province economy by using Input-Output analysis with the coverage stated in the previous chapter. Assessment of the role of pulp and paper industry can be seen
through linkages with other sectors, the ability to pull the upstream and to push the downstream sectors, multiplier effects on total output and total income of all
sectors, as well as role in key sectors of the economy that is expected to provide
The Economy of Riau Province
Non-oil Manufacturing Industry
Pulp and Paper Industry
Input-Output Analysis
Linkage Analysis
Dispersion Analysis
Multiplier Analysis
Key Sectors
Analysis Descriptive Analysis
‐Output Structure
‐Demand Structure
‐ Gross Value Added
‐Investment ‐Export‐
Import.
an overview of development of pulp and paper industry. Framework in this research can be seen in figure 2.2.
The Role of Pulp and Paper Industry in The Economy of Riau Province
Figure 2.2 Research Framework
2.7 Research Hypothesis
Based on the research problems, then the hypothesis of this research are: 1.
Pulp and paper industry has high contribution in the economy of Riau Province in term of demand structure, output structure, gross value added,
investment and export-imports. 2.
Pulp and paper industry has high linkages with other sectors in the economy of Riau Province.
3. Pulp and paper industry has a role in encouraging and exciting growth of
upstream and downstream sectors in the economy of Riau Province. 4.
Pulp and paper industry has high value of output multiplier and income multiplier income in the economy of Riau Province.
5. Pulp and paper industry is one of the key sectors of the economy of Riau
Province.
III. RESEARCH METHODS
3.1 Research Location
Riau Province becomes the main area in this research on the role of pulp and paper industry. The decision on Riau Province was supported by several facts:
1. The largest pulp and paper companies are located in Riau Province,
such as PT. IKPP and PT. RAPP. 2.
Riau Province provides abundance natural resources for pulp and paper industry and has potential for the development of the industry.
3. Expectation on Riau Province social economy condition towards large
scales companies.
3.2 Type and Source of Data
The type of data used in this study is secondary data, namely Table of Input- Output on domestic transaction based on producer price in Riau Province 2010
from classification from 112 sectors, published by Center of Study on the Dynamics of Development System PKDSP, Brawijaya University, Malang and
Bappeda of Riau Province, which will be aggregated into 22 sectors by the writer using Microsoft Excel 2011. After being aggregated, the linkage, dispersion effect
and multiplier are calculated using Input-Output Analysis for Practitioners IOAP 1.0.1. Literature studies using journals and articles and other relevant data
also used in this research. Input-Output Table of Riau Province 2010 is chosen because it is the most updated data available during this study.
