Hera Susanti, Mohamad Dian Revindo, Sulistiadi Dono Iskandar, Nalendro Nusantoro, Syahda Sabrina

Do Tourism-Related Sectors Drive Most of the Economy in Toba Regency? A RAS-based Regional Input-Output Analysis

Introduction

Do tourism-related sectors drive most of the economy in toba regency? a ras-based regional input-output analysis. Explore Toba Regency's economy with RAS-based Input-Output analysis. Discover paper manufacturing, agriculture & construction drive growth, not tourism. Crucial for regional policymaking.

Abstract

Research Originality: This study constructs the first regional Input–Output (RIO) table for Toba Regency in 2023, utilizing the iterative RAS technique to adapt provincial coefficients to local macroeconomic data. Research Objectives: To estimate sectoral interlinkages, multiplier effects, and labor intensity for Toba Regency, and to identify strategic sectors that can drive regional economic growth and inform evidence-based policymaking. Research Methods: The 2016 North Sumatra I–O table was regionalized into a 22-sector Toba Regency table through RAS, with row and column sums adjusted to match Toba Regency GRDP by industry and expenditure. The resulting table was analyzed to calculate backward and forward linkages, output multipliers, and labor intensity. Empirical Results: The local economy is primarily driven by paper manufacturing, agriculture, and construction, while the tourism sector contributes only 6.2 percent of output and exhibits weak forward linkages. This finding suggests limited integration of tourism-related activities into the local supply chain. Electricity, business services, and agriculture emerge as growth drivers, while wage disparities persist in low-productivity service sectors. Implications: The approach can guide other subnational governments in producing localized Input–Output (I–O) tables, thereby enhancing evidence-based policymaking. JEL Classification: D57, R15, R58 How to Cite:Susanti, H., Revindo, M.D., Iskandar, S.D., Nusantoro, N., & Sabrina, S. (2025). Do Tourism-Related Sectors Drive Most of the Economy in Toba Regency? A RAS-based Regional Input-Output Analysis. Signifikan: Jurnal Ilmu Ekonomi, 14(2), 521-536. https://doi.org/10.15408/sjie.v14i2.46490.

Review

This study offers a timely and significant contribution to regional economic analysis by constructing the first regional Input-Output (RIO) table for Toba Regency for 2023. Employing the iterative RAS technique to adapt a provincial I-O table to local macroeconomic data, the research successfully addresses the challenge of data scarcity at the subnational level. The clearly defined objectives—to estimate sectoral interlinkages, multiplier effects, and labor intensity, and to identify strategic sectors for economic growth—are well-aligned with the needs of evidence-based policymaking. The methodological approach, which regionalizes the 2016 North Sumatra I-O table into a 22-sector Toba Regency table adjusted with local GRDP data, is robust and provides a valuable framework for other subnational governments. The empirical results present a compelling and somewhat unexpected finding, directly addressing the core question posed in the title. Contrary to potential assumptions about a tourism-dependent economy, the study reveals that Toba Regency's economy is primarily driven by paper manufacturing, agriculture, and construction. The tourism sector, while present, contributes only 6.2 percent of output and, critically, exhibits weak forward linkages, indicating limited integration into the local supply chain. This finding is pivotal for regional development, as it highlights key growth drivers such as electricity, business services, and agriculture, while also identifying persistent wage disparities in low-productivity service sectors. The implications of this research are substantial. Beyond providing specific actionable insights for Toba Regency, the study's methodological approach serves as an excellent guide for other subnational entities aiming to develop their own localized I-O tables. By offering a data-driven perspective that challenges prevailing narratives about tourism's economic dominance, the paper encourages a more nuanced and diversified approach to regional development strategy. While the abstract clearly communicates the findings, the full paper would likely delve deeper into the reasons behind tourism's weak integration and propose specific policy recommendations to strengthen its linkages, ultimately enhancing the overall impact of this crucial analysis.

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