How Do Foreign and Domestic Demand Affect Exports Performance? An Econometric Investigation of Indonesia's Exports
AbstractThis paper explores the impacts of foreign and domestic demand on Indonesia's exports within demand and supply frameworks using aggregate data of 1971 - 2007. To capture effects of secular and cyclical movements on exports, we dissect income variables into trend and business cycle as proxies of productive capacity and capacity utilization rate, respectively. Our result suggests that both demand- and supply-price elasticity are elastic, and secular and cyclical movements may have contrast effects on exports. The findings draw policy implications namely the importance of price-based policy, provision of adequate and sound infrastructures, and further development of human capital-based industrialization.
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Bibliographic InfoPaper provided by Hiroshima University, Graduate School for International Development and Cooperation (IDEC) in its series IDEC DP2 Series with number 1-4.
Length: 28 pages
Date of creation: Sep 2011
Date of revision: Jan 2012
Publication status: Published in Modern Economy, Vol.3 No.1, January 2012, Pages 32-42
Exports; demand and supply for exports; domestic demand pressure; Indonesia; simultaneous equations.;
Find related papers by JEL classification:
- C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-21 (All new papers)
- NEP-CSE-2011-11-21 (Economics of Strategic Management)
- NEP-DEV-2011-11-21 (Development)
- NEP-SEA-2011-11-21 (South East Asia)
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