The Ability of Export and GDP Value Added in Explaining the Variation of Employment Opportunities in Indonesia

Objective – This study aims to obtain empirical evidence regarding the ability of exports and gross domestic product (GDP) value-added in explaining the variation of employment opportunities in Indonesia. The method used in this study is explanatory research. Methodology/Technique – This research uses panel data which is a combination of time series data for 8 (eight) years with the cross section of 33 provinces in Indonesia. Data were analyzed using structural equation regression through fixed effect technique and common effect technique. Findings – The results show that using fixed effect technique, the export plays a positive and significant role in creating GDP value added and plays a negative role in creating employment opportunities, whereas the estimated GDP value-added plays a positive and significant role in shaping the employment opportunities in Indonesia. However, using common effect technique, the export plays a positive and significant role in shaping the GDP value added as well as both export. Novelty – The study suggests that GDP value-added play a positive and significant role in shaping the employment opportunities in Indonesia. Type of Paper: Empirical.