Abstract
The increase of export value of creative industry in the middle of the declining export value of Indonesia's leading commodities during the period of 2011 to 2015 indicates that the creative industry potentially encourages the economic growth in Indonesia. This study aims to observe the linkages of creative industries, both forward and backward linkages, with other sectors in the economy. This study also examines the impacts of the increasing export on the fashion and craft sectors, as the two largest contributors to the export of creative industries, towards the Indonesian economy. Applying the Input-Output approach, the influence of the export of fashion and craft sectors towards the Indonesian economy is seen from the multiplier effects on the increasing value added, community income and labor absorption. The results show that fashion exports increased the national value added by 0.06%; community income 0.06% and employment 0.11%. Similarly, craft exports increased the national value added by 0.05%; income by 0.05% and employment by 0.11%. The largest increase is in the labor absorption; this is because the fashion and craft sectors are labor intensive sectors.
Highlights
Export is an international trading activity that has an important role in encouraging the economy
The international trade theory proposed by Smith outlines that international trade activities, especially exports, potentially encourage economic growth through the domestic productionmarket expansion (Afonso, 2001)
In the case study of Indonesia shows that Indonesia's exports and economic growth have closely related relationship
Summary
Export is an international trading activity that has an important role in encouraging the economy. The international trade theory proposed by Smith outlines that international trade activities, especially exports, potentially encourage economic growth through the domestic productionmarket expansion (Afonso, 2001). Several previous empirical studies showed that there is a positive relationship between export and economic growth as in the case study of developing countries in Asia (Ekanyake, 1999), Scandinavian countries (Hatemi and Irandoust, 2000), Iran (Roshan, 2007) and Taiwan (Chen, 2007). In the case study of Indonesia shows that Indonesia's exports and economic growth have closely related relationship. The decline in prices of some Indonesia's mainstay commodities abroad such as palm oil and minerals is one of the causes of the decline in the Indonesia's export value
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