Labor Absorption in Gerbangkertosusilo Plus: Mediating Effects of Firm Numbers on Regional Employment Dynamics
Keywords:
Agglomeration, Business Entities, Employment, Industry
Abstract
Industrial agglomeration is expected to stimulate economic activity and employment; however, the Gerbangkertosusilo Plus (GKS Plus) area, the main industrial hub of East Java Province, continues to experience an unemployment rate above the national average. This study investigates the determinants of labor absorption in the GKS Plus agglomeration area by examining both direct and indirect effects through the mediating role of the number of firms. A quantitative causal research design was employed using panel data from ten cities and regencies in the GKS Plus area covering the 2017–2024 period. Panel data regression with a path analysis framework was applied to estimate the relationships among variables, while the Sobel test was used to assess the significance of indirect effects. The estimated results indicate that industrial sector GRDP, government capital expenditure, and the agglomeration index are significant determinants of labor absorption, both through direct relationships and through indirect pathways mediated by the number of firms. This study provides new insights into how economic factors affect labor absorption through the mediating role of the number of manufacturing firms. The research also offers analytical novelty by expanding the scope of the Gerbangkertosusilo agglomeration area from the conventional seven regions to ten cities and regencies. These findings highlight the importance of maintaining industrial diversification while regulating the growth of firms within environmental carrying capacity to reduce excessive competition, pollution, congestion, and rising land costs, thereby sustaining the positive employment effects of industrial agglomeration.
Keywords: Agglomeration, Business Entities, Employment, Industry.
References
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Aisyah, S., Suharto, R. B., Jiuhardi, J., & Amalia, S. (2025). The Influence of Human Capital, Infrastructure Availability and Minimum Wages on Labor Absorption in Eastern Indonesia. International Journal of Economics (IJEC), 4(1), 287–303. https://doi.org/10.55299/ijec.v4i1.1319
Ajide, F. M. (2020). Infrastructure and Entrepreneurship: Evidence from Africa. Journal of Developmental Entrepreneurship, 25(3). https://doi.org/10.1142/S1084946720500156
Alfarih, H. (2024). Pengaruh Pertumbuhan Ekonomi, Upah Minimum, dan Jumlah Industri terhadap Penyerapan Tenaga Kerja di Wilayah Karesidenan Kedu Tahun 2010–2022. Universitas Islam Negeri Sunan Kalijaga.
Alfiyani, N., & Syawaludin, M. (2025). Analisis Perbandingan Tpak Dan Tpt Terhadap Kemiskinan Di Gerbangkertosusila Tahun 2019-2023. Ganec Swara, 19(1), 134–139. https://doi.org/10.59896/gara.v19i1.192
Bappeda Jawa Timur. (2024). Rencana Pembangunan Jangka Panjang Daerah Jawa Timur.
Basile, R., Pittiglio, R., & Reganati, F. (2017). Do agglomeration externalities affect firm survival? Regional Studies, 51(4), 548–562. https://doi.org/10.1080/00343404.2015.1114175
BPS. (2025). Jumlah Penduduk Menurut Kelompok Umur dan Jenis Kelamin, 2025. BPS.
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BPS Jawa Timur. (2024b). Keadaan Ketenagakerjaan Jawa Timur Agustus 2024. In Badan Pusat Statistik Jawa Timur.
Chen, C. C. (2015). Industrial agglomeration, clusters, and regional new firm formation: A case study of Taiwan’s counties/cities. Applied Econometrics and International Development, 15(1), 171–188.
Deschamps, P., & Wilemme, G. (2025). Local labor market dynamics and agglomeration effects. European Economic Review, 180, 105146. https://doi.org/10.1016/j.euroecorev.2025.105146
Dewi, R. R. (2019). Pengaruh Jumlah Industri Kecil dan Menengah (IKM) dan PDRB terhadap Penyerapan Tenaga Kerja di Sektor IKM di Provinsi Jawa Timur Tahun 2015–2017. Universitas Islam Negeri Sunan Ampel Surabaya.
Fauzani, S. P., & Rahmi, D. (2023). Penerapan Metode ARIMA Dalam Peramalan Harga Produksi Karet di Provinsi Riau. Jurnal Teknologi Dan Manajemen Industri Terapan, 2(4), 269–277. https://doi.org/10.55826/tmit.v2i4.283
Fukuda, Y. (2020). Land prices and agglomeration: Theory and evidence from the Tokyo metropolitan area. Regional Science and Urban Economics, 58. https://doi.org/10.1016/j.jjie.2020.101094
Gibbons, S., Lyytikäinen, T., Overman, H. G., & Sanchis-Guarner, R. (2019). New road infrastructure: The effects on firms. Journal of Urban Economics, 110(January), 35–50. https://doi.org/10.1016/j.jue.2019.01.002
Guo, L., Tang, M., Wu, Y., Bao, S., & Wu, Q. (2025). Government-led regional integration and economic growth: Evidence from a quasi-natural experiment of urban agglomeration planning policies in China. Cities, 156(105482). https://doi.org/https://doi.org/10.1016/j.cities.2024.105482
Hasanpouri, K., Shokoohi, F., & Farrokhi, Z. (2025). SP-RF-ARIMA : A sparse random forest and ARIMA hybrid model for electric load forecasting. Global Energy Interconnection. https://doi.org/10.1016/j.gloei.2025.04.003
Imantria, B. (2024). Economic Growth in Central Java: Does Manufacturing Industry Agglomeration Matter? Diponegoro Journal of Economics, 13(4), 1–14. https://doi.org/10.14710/djoe.48051
Jaya, T. J., & Kholilah, K. (2020). Effect of Gross Domestic Regional Product, Provincial Minimum Wage, and Investment on Labor Absorption. Jurnal Ekonomi Bisnis Dan Kewirausahaan, 9(3), 236. https://doi.org/10.26418/jebik.v9i3.42642
JDIH BPK Indonesia. (2022). Rencana Tata Ruang Kawasan Strategis Nasional Kawasan Perkotaan Gresik, Bangkalan, Mojokerto, Surabaya, Sidoarjo, dan Lamongan. JDIH BPK Indonesia.
Kharroubi, E. (2022). Growth expectations and the dynamics of firm entry. BIS Working Papers, 1036.
Khosropour, A. (2017). A panel data analysis of the relationship between corporate social responsibility and earnings managemnet : evidence from Iran. Revista QUID, 1(1), 2423–2431.
López, H. A., Yagüe-Perales, R., & March-Chordá, I. (2024). New Evidence of the Impact of Innovative Capacity on Firm Employment. Administrative Sciences, 14(10). https://doi.org/10.3390/admsci14100244
Lube, F., Kalangi, J. B., & Tolosang, K. D. (2021). Analisis Pengaruh Upah Minimum dan PDRB terhadap Penyerapan Tenaga Kerja di Kota Bitung. Jurnal Berkala Ilmiah Efisiensi, 21(03), 25–36.
Marshall, A. (1920). Principles of Economics (8th ed.). Macmillan.
Matsuo, K., Tsutsumi, M., & Imazeki, T. (2023). Temporal Changes in the Economics and Diseconomics of Agglomeration in the Tokyo Office Market. Journal of Japan Society of Civil Engineers, 78, I_263-I_274. https://doi.org/10.2208/jscejipm.78.5_I_263
Muhlisin, M., & Sakti, N. C. (2024). Efek Moderasi Pendidikan pada Pengaruh Pendapatan dan Konsumsi terhadap Pertumbuhan Ekonomi di Wilayah Gerbangkertosusila. Jurnal Pendidikan Ekonomi, Manajemen Dan Keuangan, 8(1), 17–36. https://doi.org/10.26740/jpeka.v8n1.p17-36
Power, B., Doran, J., & Ryan, G. (2019). The effect of agglomeration economies on firm deaths: A comparison of firm and regional based approaches. Urban Studies: An International Journal of Research in Urban Studies, 56(16), 3358–3374. https://doi.org/10.1177/0042098018817428
Pratysto, T., Destiartono, M. E., & Kafabih, A. (2026). Does Tertiary Education Alleviate Unemployment in Middle-income Countries? Insights from a Dynamic Panel Data. Jurnal Ekonomi & Studi Pembangunan, 27(1), 1–14. https://doi.org/10.18196/jesp.v27i1.29792
Rahayu, T., Tobing, R. D., Sinaga, O. S., & Suharianto, J. (2025). Analisis Mediasi Pengaruh Belanja Daerah dalam Pengaruh Belanja Modal dan Investasi PMDN Terhadap PDRB Sumatera Utara 2011-2024. Jurnal IKRAITH-EKONOMIKA, 8(3), 632–643.
Renaldi, W., & Nurfahmiyati. (2022). Pengaruh Upah Minimum, Pertumbuhan Ekonomi dan Investasi terhadap Penyerapan Tenaga Kerja di Sumbar. Jurnal Riset Ilmu Ekonomi Dan Bisnis, 2(1), 23–30. https://doi.org/10.29313/jrieb.vi.647
Rudatin, A., Haq, A. G. F., & Perdana, A. R. A. (2024). Determinants of labour absorption in ASEAN. Jurnal Kebijakan Ekonomi Dan Keuangan, 3(2), 174–181. https://doi.org/10.20885/jkek.vol3.iss2.art7
Saraswati, B. D., Krisnawati, Y. D., & Adhitya, D. (2022). Determinan Penyerapan Tenaga Kerja 34 Provinsi Di Indonesia: Pendekatan Fixed Effect Model. Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi (MEA), 6(3), 1139–1156. https://doi.org/10.31955/mea.v6i3.2218
Satrio, A. M. A. (2021). Pengaruh Belanja Modal, PMA dan PMDN terhadap Penyerapan Tenaga Kerja di Kota Makassar.
Sobel, M. E. (1982). Asymptotic Confidence Intervals for Indirect Effects in Structural Equation Models. Sociological Methodology, 13, 290. https://doi.org/10.2307/270723
Sularno, S., & Jauhari, S. (2017). Peluang Usaha Melalui Agribisnis Mina Padi Untuk Meningkatkan Pendapatan Petani. SEPA: Jurnal Sosial Ekonomi Pertanian Dan Agribisnis, 10(2), 268. https://doi.org/10.20961/sepa.v10i2.14136
Tasmilah. (2021). Pengaruh Belanja Pemerintah dan Pertumbuhan Ekonomi Terhadap Penyerapan Tenaga Kerja Formal di Indonesia. Journal of Regional Economics Indonesia, 2(2), 92–115. https://doi.org/10.26905/jrei.v2i2.7220
Tasyim, D. A. R. S., Kawung, G. M. V., & Siwu, H. F. D. (2021). Pengaruh Jumlah Unit Usaha UMKM dan PDRB Terhadap Penyerapan Tenaga Kerja di Sulawesi Utara. Jurnal EMBA, 9(3), 391–400.
Widodo, P. E. N., & Woyanti, N. (2023). Analisis Pengaruh Pdrb, Unit Usaha, Dan Umk Terhadap Penyerapan Tenaga Kerja Industri Manufaktur Besar Dan Sedang Di Jawa Timur Tahun 2015 - 2019. BISECER (Business Economic Entrepreneurship), 6(2), 34–45. https://doi.org/10.61689/bisecer.v6i2.394
Widyapangesti, D. I., & Soelistyo, A. (2022). Analisis Pengaruh PDRB, Investasi, Upah Minimum Provinsi Terhadap Penyerapan Tenaga Kerja Di Pulau Jawa. Jurnal Ilmu Ekonomi (JIE), 6(1), 123–133. https://doi.org/10.22219/jie.v6i1.19128
Wu, X., Huang, Y., & Gao, J. (2022). Impact of industrial agglomeration on new-type urbanization: Evidence from Pearl River Delta urban agglomeration of China. International Review of Economics & Finance, 77, 312–325. https://doi.org/https://doi.org/10.1016/j.iref.2021.10.002
Yanti, R. P. D., Riniati, Yunitasari, D., & Yuliati, L. (2023). Pengaruh Tenaga Kerja dan Aglomerasi Industri terhadap Pertumbuhan Ekonomi di Jawa Timur. Jurnal Perencanaan Wilayah Dan Pembangunan, 1(2), 72–83.
Yustitia, E., Thoriq, A. M., & Ardiansyah, H. (2022). Pengaruh Penyerapan Tenaga Kerja Terhadap Tingkat Kemiskinan di Kabupaten Purwakarta Periode 2011 – 2020. Jurnal Maps (Manajemen Perbankan Syariah), 6(1), 43–52. https://doi.org/10.32627/maps.v6i1.574
Published
2026-09-12
How to Cite
Fajar Firmansyah, & Farida Rahmawati. (2026). Labor Absorption in Gerbangkertosusilo Plus: Mediating Effects of Firm Numbers on Regional Employment Dynamics. International Journal of Economics, Business and Innovation Research, 5(05), 3864-3883. https://doi.org/10.63922/ijebir.v5i05.6491
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