The Impact of the Fishery Sector on Economic and Social Welfare in Indonesia: The Moderating Role of Cooperatives in Driving Economic and Social Welfare in Indonesia

Panel Barus

doi:10.59261/inkubis.v8i2.314

Authors

Panel Barus Universitas Indonesia

DOI:

https://doi.org/10.59261/inkubis.v8i2.314

Keywords:

Fishery Sector, Economic Growth, Income Inequality, Panel Regression JEL classification, Cooperatives

Abstract

Background: The fishery sector plays a strategic role in supporting economic growth and social welfare in Indonesia. However, empirical evidence regarding whether cooperatives strengthen the contribution of the fishery sector across regions with different economic structures remains limited.

Objective: This study analyzes the impact of the fishery sector on economic growth and income inequality in Indonesia and examines the moderating role of cooperatives while identifying regional heterogeneity between Java and Eastern Indonesia.

Methods: This study employs balanced panel data from 34 Indonesian provinces during 2010–2025, comprising 544 observations. The Fixed Effects Model (FEM) is applied to control for province-specific heterogeneity, while the Panel Autoregressive Distributed Lag (Panel ARDL) model and the Generalized Method of Moments (GMM) estimators, including the First-Difference GMM (FD-GMM) and System GMM (Sys-GMM), are used as robustness checks to address dynamic relationships and potential endogeneity issues.

Results: Fishery productivity significantly increases Regional Gross Domestic Product (Regional GDP) (β = 0.108, p < 0.01), with a stronger effect observed in Eastern Indonesia (β = 0.173, p < 0.01). Cooperatives significantly enhance the positive contribution of the fishery sector to regional economic performance and income distribution in Eastern Indonesia, whereas their moderating effect is limited in Java. Robustness analyses confirm the consistency and reliability of these findings.

Conclusion: The contribution of the fishery sector depends on regional economic structures and institutional support mechanisms. Strengthening cooperative governance, particularly in fishery-dependent regions, is essential for promoting inclusive economic growth and reducing regional inequality.

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