Spatial patterns and drivers of micro, small and medium-sized enterprises (MSMEs) within and across Indonesian cities: Evidence from highly granular data

Abstract

The importance of micro-, small-, and medium-sized enterprises (MSMEs) for economies and livelihood is widely recognized, especially in emerging economies. However, there are scarcely any studies on their spatial determinants, particularly in Indonesia, where MSMEs account for more than 95 % of enterprises. This paper aims to assess the spatial drivers of MSMEs within and between Indonesian cities using multilevel modeling techniques that incorporate district (n=98) and nested village-level (n=4995) spatial units. The study's findings have implications for policy interventions, suggesting the need to enhance infrastructure and digital connectivity, promote employment accessibility, and consider planning mechanisms to influence MSMEs' spatial configuration.