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Trade policy and exporters’ resilience: Evidence from Indonesia

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  • Calì, Massimiliano
  • Graciano, Simón Caicedo
  • Ghose, Devaki
  • Montfaucon, Angella Faith
  • Ruta, Michele

Abstract

How does trade policy affect exporters’ ability to source intermediate inputs and adjust exports in response to foreign shocks? The analysis exploits new disaggregated, time-varying data on non-tariff measures (NTMs) faced by Indonesian firms. In response to a depreciation of the Yuan, which makes Chinese exports more competitive in third markets, Indonesian firms facing NTMs on their inputs see a much larger drop in their export values compared to firms that do not face any NTMs, with the magnitude of this effect varying depending on the type of NTM. We show that this difference can be explained by the inability of firms facing NTMs to take advantage of cheaper intermediate inputs from China in the face of depreciations of the Yuan, consistent with a model where NTMs impose fixed costs of import. These findings suggest that reforming some types of import NTMs can positively affect exporters’ resilience.

Suggested Citation

  • Calì, Massimiliano & Graciano, Simón Caicedo & Ghose, Devaki & Montfaucon, Angella Faith & Ruta, Michele, 2026. "Trade policy and exporters’ resilience: Evidence from Indonesia," Journal of Development Economics, Elsevier, vol. 179(C).
    • Handle: RePEc:eee:deveco:v:179:y:2026:i:c:s0304387825001129
    DOI: 10.1016/j.jdeveco.2025.103561
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    3. Luca Macedoni & Ariel Weinberger, 2025. "International Spillovers Of Quality Regulations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 66(1), pages 453-484, February.
    4. Borui Tian & Mingyue Zheng & Wenjie Liu & Yueqing Gu & Yi Xing & Chongchao Pan, 2024. "Impacts of Carbon Border Adjustment Mechanism on the Development of Chinese Steel Enterprises and Government Management Decisions: A Tripartite Evolutionary Game Analysis," Sustainability, MDPI, vol. 16(8), pages 1-32, April.
    5. Shakib, Mohammed & Sohag, Kazi & Hassan, M. Kabir & Vasilyeva, Rogneda, 2023. "Finance and export diversifications Nexus in Russian regions: Role of trade globalization and regional potential," Emerging Markets Review, Elsevier, vol. 57(C).
    6. Mohammed Shakib, 2023. "Innovation-Export Diversification Nexus in Russian Regions: Does Trade Globalization, Business Potential and Geopolitics Matter?," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 22(4), pages 932-974.
    7. Dai, Zhihui & Niu, Yue, 2025. "Assessing export resilience and its dimensional subdivision in China's labor-intensive manufacturing industry," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 1854-1875.
    8. Shadrack Muthami Mwatu & Charity Kageni Mbaka & John Gakuu Karanja & Grace Mukami Muriithi, 2024. "Trade Agreements, Technical Regulations, and Standards: Competitiveness Implications for Kenyan Exporters to European Union," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(2), pages 381-410, April.

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    Keywords

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    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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