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EXPORT DETERMINANT ANALYSIS: INDONESIA’S EXPORT TO SINGAPORE AND JAPAN CASE STUDY

Year 2019, Volume: 8 Issue: 2, 114 - 126, 30.06.2019

Euis Eti Sumiyati

https://doi.org/10.17261/Pressacademia.2019.1042

Abstract

Purpose- This study analyses the influence in Rupiah’s exchange rate and the economic growth of trading partner country of Indonesia’s export which are Singapore and Japan as the two biggest trading countries in Indonesia’s export products in Asia region.
Methodology- Economy models used as analysis tools in this research are co-integration method and dynamic linear Error Correction Mechanism Model.
Findings- This study discovered that in long term, exchange rate has a negative impact to Indonesia’s export, both for Singapore and Japan, while in short term the exchange rate does not have any correlation with export. Subsequently, economic growth of the trading partner country in long term has positive impact to export, while in short term it has no impact.
Conclusion- Findings of this empirical studies showed that in the long term, the effect of the exchange rate to Indonesia’s export to Japan is greater compared to Singapore. Subsequently, the effect of Singapore’s economic growth to Indonesia’s export is greater compared to the effect of Japan’s economic growth. The exchange rate has negative impact to Indonesia’s export, both from Singapore and Japan. The result of this study has a probability to happen in Indonesia because Indonesia’s export is still dominated by commodities with prices that tend to decrease, thus the effect of weakening rupiah is very small compared to export increase.

Keywords

Exchange rate Export Economic growth

References

  • Bank of Indonesia, Indonesia’s Statistic of Economy and Financial (various periods)
  • Budiono. (2015). Masyarakat ekonomi ASEAN 2015. Memperkuat sinergi ASEAN di tengah kompetensi global. Direkterot Internasional. Bank Indonesia
  • Bustaman, A. & Jayanthakumaran, K. (2007). The impact of exchange rate volatility on Indonesia's exports to the USA: An Application of ARDL Bounds Testing Procedure. International Journal of Applied Business And Economic Research. 5 (1), 1-21.
  • Cheung, Yin-Wong & Sengupta, Rajeswari. (2013). Impact of exchange rate movements on exports: an analysis of Indian non-financial sector firms. Journal of International Money and Finance. Elsevier. Vol. 39(C), Pages 231-245
  • Chit, Myint M. (2008). Exchange rate volatility and exports: evidence from the ASEAN-China free trade area. Journal of Chinese Economic and Business Studies. 6(3): 261-277.
  • Ekananda,M. (2016). Analisis ekonometrika time series. Penerbit. Mitra Wacana Media
  • Fitrianti, Shinta. (2017). T he exchange rate volatility and export performance: the case of Indonesia's exports to Japan and the US. Buletin Ekonomi Dan Perbankan Vol 20 No 1.
  • Grier And Smallwood. (2013). Exchange rate shocks and trade: a multivariate GARCH multivarian approach. Journal Of International Money And Finance. Vol. 37, Issue C, 282-305 .
  • Gujarati, D. (2003). Basic Econometrics, 4th edition. McGraw-Hill. Inc.
  • Hock-Tsen Wong dan Hock-Ann. (2016). Exchange rate volatility and exports of Malaysian manufactured goods to China: an empirical analysis International Journal of Business and Society. Vol. 17 No. 1, 2016, 145 - 159
  • Huchet-Bourdon & Korinek. (2012). Trade effects of exchange rate and their volatility: Chili and New Zealand. OECD Trade Policy Paper No. 136. OECD Publishing.
  • Krugman, Paul R.; Obstfeld, Maurice Alih Bahasa Basri, Faisal H. (2004). International Economics. Ed.5, ISBN: 979-683-138-4. Penerbit: Indeks, Jakarta
  • Mankiw, N. Gregory. (2009). Macroeconomics, 7th Edition. Harvard University, Worth Publishers. New York.
  • Salvatore,D. (2013). International Economics, Eleventh Edition, Fordham University. ISBN 978-1-118-17793-8
  • Solakoglu Et Al. (2008). Exchange rate volatility and exports: a firm-level analysis. Journal Applied Economics. Volume 40, 2008 - Issue 7 Pages 921-929 | Published Online: 11 Apr 2011

Year 2019, Volume: 8 Issue: 2, 114 - 126, 30.06.2019

Euis Eti Sumiyati

https://doi.org/10.17261/Pressacademia.2019.1042

Abstract

References

  • Bank of Indonesia, Indonesia’s Statistic of Economy and Financial (various periods)
  • Budiono. (2015). Masyarakat ekonomi ASEAN 2015. Memperkuat sinergi ASEAN di tengah kompetensi global. Direkterot Internasional. Bank Indonesia
  • Bustaman, A. & Jayanthakumaran, K. (2007). The impact of exchange rate volatility on Indonesia's exports to the USA: An Application of ARDL Bounds Testing Procedure. International Journal of Applied Business And Economic Research. 5 (1), 1-21.
  • Cheung, Yin-Wong & Sengupta, Rajeswari. (2013). Impact of exchange rate movements on exports: an analysis of Indian non-financial sector firms. Journal of International Money and Finance. Elsevier. Vol. 39(C), Pages 231-245
  • Chit, Myint M. (2008). Exchange rate volatility and exports: evidence from the ASEAN-China free trade area. Journal of Chinese Economic and Business Studies. 6(3): 261-277.
  • Ekananda,M. (2016). Analisis ekonometrika time series. Penerbit. Mitra Wacana Media
  • Fitrianti, Shinta. (2017). T he exchange rate volatility and export performance: the case of Indonesia's exports to Japan and the US. Buletin Ekonomi Dan Perbankan Vol 20 No 1.
  • Grier And Smallwood. (2013). Exchange rate shocks and trade: a multivariate GARCH multivarian approach. Journal Of International Money And Finance. Vol. 37, Issue C, 282-305 .
  • Gujarati, D. (2003). Basic Econometrics, 4th edition. McGraw-Hill. Inc.
  • Hock-Tsen Wong dan Hock-Ann. (2016). Exchange rate volatility and exports of Malaysian manufactured goods to China: an empirical analysis International Journal of Business and Society. Vol. 17 No. 1, 2016, 145 - 159
  • Huchet-Bourdon & Korinek. (2012). Trade effects of exchange rate and their volatility: Chili and New Zealand. OECD Trade Policy Paper No. 136. OECD Publishing.
  • Krugman, Paul R.; Obstfeld, Maurice Alih Bahasa Basri, Faisal H. (2004). International Economics. Ed.5, ISBN: 979-683-138-4. Penerbit: Indeks, Jakarta
  • Mankiw, N. Gregory. (2009). Macroeconomics, 7th Edition. Harvard University, Worth Publishers. New York.
  • Salvatore,D. (2013). International Economics, Eleventh Edition, Fordham University. ISBN 978-1-118-17793-8
  • Solakoglu Et Al. (2008). Exchange rate volatility and exports: a firm-level analysis. Journal Applied Economics. Volume 40, 2008 - Issue 7 Pages 921-929 | Published Online: 11 Apr 2011
There are 15 citations in total.

Details

Primary Language English
Subjects Finance
Journal Section Articles
Authors

Euis Eti Sumiyati This is me 0000-0002-7567-3045

Publication Date June 30, 2019
Published in Issue Year 2019 Volume: 8 Issue: 2

Cite

APA Sumiyati, E. E. (2019). EXPORT DETERMINANT ANALYSIS: INDONESIA’S EXPORT TO SINGAPORE AND JAPAN CASE STUDY. Journal of Business Economics and Finance, 8(2), 114-126. https://doi.org/10.17261/Pressacademia.2019.1042
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