Industrialization Paradox: Manufacturing Growth and Women’s Financial Independence in NTT

Elsha Constan Angu Bima

Abstract


This study examines whether manufacturing growth in East Nusa Tenggara (NTT) Province, Indonesia, translates into greater financial independence for women, particularly women who weave ikat cloth. This study is motivated by the observation that NTT's manufacturing GRDP continues to grow while women weavers remain dispersed, informal, and disconnected from that growth. To the best of the author's knowledge, this relationship has received limited attention in NTT, and whether women's own labor force participation reliably improves their financial wellbeing has not previously been tested against common annual shocks; prior quantitative work operates mainly at the cross-country or national level, while NTT-specific evidence on ikat weaving remains qualitative. This study contributes region-specific empirical evidence by testing the industrialization paradox using a panel approach that extends beyond a standard one-way fixed-effects model to a two-way specification controlling for region and year effects. Using panel data from 21 regencies and 1 city in NTT over 2019-2023, this study estimates the relationship between manufacturing GRDP growth, female labor force participation, micro and small enterprises, and gender development and women's per capita expenditure, used as a proxy for financial independence. Once common annual shocks are accounted for, none of these factors, including women's own labor force participation, retains a meaningful association with their financial independence. This points to a deeper industrialization paradox in NTT, where women weavers' wellbeing appears to be shaped by informal, household-level, and shock-driven dynamics that standard indicators fail to capture, with implications for designing more targeted, weaving-specific interventions rather than relying on aggregate industrial growth alone.

 

Keywords: development economics, industrialization paradox, ikat weaving,

women's financial independence, panel data regression

 


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References


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DOI: https://doi.org/10.21107/bep.v7i2.35486

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