This study explores the determinants of the export performance of Indonesia's low-, medium-, and high-technology manufacturing industries by focusing on the role of raw-material imports and technical efficiency. Micro firm-level data from 2010-2015 were utilized for the analysis in this study. The stochastic frontier analysis was employed to measure technical inefficiency and to determine its effect on export performance. Our findings indicate that in all categories of industry technical efficiency, raw materials imports, foreign direct investment (FDI), location, firm size, labour productivity, and concentration of industries were significant determinants of export performance. While high efficiency increases exports in low- and medium-technology firms, exports decrease in firms with high efficiency accompanied by high imports, FDI, size, and labour productivity. Furthermore, in high-technology industries, efficiency reduces exports and again increases them when mediated by a concentration of industries and location. The empirical strategy also supports the positive effect of imports on export performance in both industries, which also aligns with decreased exports in firms with high imports accompanied by high FDI, efficiency, labour productivity, the concentration of industries, and size. To this end, the study has implications for low-, medium-, and high-technology manufacturing that are mainly concerned with increasing exports.
Industry , Manufacturing Industry , Indonesia , Technology , Commerce , China
This study used a two-step system generalized method of moment (GMM) and spatial aspects to analyze Indonesia's trade margins of a rubber product to export destination countries over the period 2009-2018. The study unraveled the role of non-tariff measures such as sanitary and phytosanitary (SPS), technical barriers to trade (TBT), and gravity factors in determining rubber trade margins. Our empirical strategies revealed that sanitary and phytosanitary policies negatively affect trade margins, while the technical barrier to trade and foreign direct investment (FDI) asserts a positive impact on trade margins. However, the economics of scale, port, and contiguity increases extensive margin and reduces intensive, population size, distance, and language barrier reduce extensive margin and increase intensive margin. Further evidence revealed that high population size and port quality accompanied by high FDI and distance increases extensive margin and reduces intensive margin. High economics of scale accompanied by distance, port quality, FDI, and population size reduces both trade margins. Our empirical strategy from the spatial analysis does not give overall significant results on each variable as only economies of scale and population size seem to have a spatial influence on trade margins. The study, therefore, recommends that innovation both in terms of technology, like industrial innovation in the field of rubber processing and certification related to rubber commodities, needs to be increased to intensify and expand Indonesia's rubber market share.
International Cooperation , Rubber , Indonesia , Investments , Internationality , Economic Development
Access to credit is crucial to improve farm performance as it allows farmers to procure inputs and technology. However, on the empirical front, evidence of the impact of agricultural credit access remains scanty. This study examines how access to credit from formal and informal sources influences the productivity and technical efficiency of maize farming in ten major maize-producing provinces in Indonesia. Secondary Food Crops Survey data by Statistics Indonesia were employed and analyzed using a quasi-experimental approach, i.e., the propensity score matching (PSM). The estimation shows that agricultural credit access improves farm performance. In fact, the ability to obtain credit from institutions increased productivity and technical efficiency more effectively than from informal sources. This study suggests that agricultural credit access remains relevant in Indonesia and needs to be improved continuously.
This study aims to investigate the influence of the volatility of exchange rates on manufacturing commodity exports in the ASEAN-5 (Indonesia, Singapore, Thailand, Malaysia, and the Philippines). The study used the ARCH/GARCH, ARDL, and Nonlinear ARDL to determine the symmetrical and asymmetrical influence of the volatility of the exchange rate on manufacturing exports in both the short run and long run. Five leading commodity exports for each of the ASEAN-5 countries were used and analyzed over the period January 2007-March 2019. Our strategy using the ARDL approach revealed that volatility has a significant influence on 13 commodity exports in the short term. While the Nonlinear ARDL approach revealed that volatility influenced 19 commodity exports. Additionally, in the long run, finding from ARDL and Nonlinear ARDL also indicates risk-averse behaviour by exporters. However, in the long run, the nonlinear model demonstrates that volatility asserts an asymmetric influence on nearly all commodity exports. With this, therefore, there is the need for policymakers to uphold steadiness in the exchange rate via the use of adequate foreign reserves and amplified the level of investment.
