This paper is concerned with the time series behavior of the cross border trade flows between Sarawak - West Kalimantan conducted through regional port of Tebedu custom district with the main focus on the long run sustainability of Sarawak trade deficits. Cross border trade activity has gain much attention due to the dynamic linkages of this unique regional economic activity on industry, investment and employment. By employing the three stages of modern time series econometric technique, the research found significant long run cointegration relationship for the bilateral trade flows as well as support for the strong form of sustainability condition, suggesting that Sarawak-West Kalimantan bilateral trade is on the sustainable path in governing their trade flows performance. This suggests that the macroeconomic policies of Sarawak and West Kalimantan have been effective in bringing exports and imports into a long run equilibrium.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
7339.
Find related papers by JEL classification: F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models F10 - International Economics - - Trade - - - General
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