IDEAS home Printed from https://ideas.repec.org/a/epw/develo/v3y2023i3id15258.html

Analysis of Macro Economic Influence on Indonesian Trade

Author

Listed:
  • Agus Tri Basuki
  • Layli Amatullah

Abstract

This study aims to analyze the influence of macroeconomic factors on Indonesia's international trade. The variables in this study are trade values, exchange rates, exports, imports, Gross Fixed Capital Formation (GFCF), Gross Domestic Income (GDP), and foreign investment (FDI). The method used in this study is the Vector Error Correction Model (VECM). The VECM method is used in the analysis of long- and short-term relationships. The relationship studied is between the independent and dependent variables in the time series data. To find out the long-term relationship in research, researchers must analyze through the cointegration equation on the VECM test results. The data used in this study is time series data for 1991-2020 taken from World Development Indicators and the Indonesian Central Bureau of Statistics. Based on the results of the short-term analysis of the GFCF variable, imports and exports have no effect on the value of trade in Indonesia. While the FDI, GDP and import variables have a significant effect on the value of trade. In the long term, the variables of exchange rates, imports, GFCF, and FDI have a positive and significant effect on the value of trade in Indonesia.

Suggested Citation

  • Agus Tri Basuki & Layli Amatullah, 2023. "Analysis of Macro Economic Influence on Indonesian Trade," European Journal of Development Studies, European Open Science, vol. 3(3), pages 67-75, April.
    • Handle: RePEc:epw:develo:v:3:y:2023:i:3:id:15258
    DOI: 10.24018/ejdevelop.2023.3.3.258
    as

    Download full text from publisher

    File URL: https://eu-opensci.org/index.php/ejdevelop/article/view/15258
    File Function: Abstract page
    Download Restriction: no
    File URL: https://eu-opensci.org/index.php/ejdevelop/article/download/15258/3458
    File Function: Full text
    Download Restriction: no
    File URL: https://libkey.io/10.24018/ejdevelop.2023.3.3.258?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Maliszewska,Maryla & Mattoo,Aaditya & Van Der Mensbrugghe,Dominique, 2020. "The Potential Impact of COVID-19 on GDP and Trade : A Preliminary Assessment," Policy Research Working Paper Series 9211, The World Bank.
    2. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    3. Xiaohua Zou, 2018. "VECM Model Analysis of Carbon Emissions, GDP, and International Crude Oil Prices," Discrete Dynamics in Nature and Society, Hindawi, vol. 2018, pages 1-11, August.
    4. Ana Paula Africano & Manuela Magalhaes, 2005. "FDI and Trade in Portugal: a gravity analysis," FEP Working Papers 174, Universidade do Porto, Faculdade de Economia do Porto.
    5. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    6. Paul, Justin & Feliciano-Cestero, María M., 2021. "Five decades of research on foreign direct investment by MNEs: An overview and research agenda," Journal of Business Research, Elsevier, vol. 124(C), pages 800-812.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rohit Mishra & Rajesh Sharma & Yaswanth Karedla & Nikunj Patel, 2025. "Impact of COVID-19 Cases, Deaths, Stringency and Vaccinations on the US Stock Market," Vision, , vol. 29(4), pages 465-477, August.
    2. Czujack, Corinna & Flôres Junior, Renato Galvão & Ginsburgh, Victor, 1995. "On long-run price comovements between paintings and prints," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 269, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    3. Bloch, Harry & Rafiq, Shuddhasattwa & Salim, Ruhul, 2015. "Economic growth with coal, oil and renewable energy consumption in China: Prospects for fuel substitution," Economic Modelling, Elsevier, vol. 44(C), pages 104-115.
    4. Gevorkyan, Arkady & Semmler, Willi, 2016. "Oil price, overleveraging and shakeout in the shale energy sector — Game changers in the oil industry," Economic Modelling, Elsevier, vol. 54(C), pages 244-259.
    5. Olsson, Olle & Hillring, Bengt, 2014. "The wood fuel market in Denmark – Price development, market efficiency and internationalization," Energy, Elsevier, vol. 78(C), pages 141-148.
    6. Rodrigo Cerda & Alvaro Donoso & Aldo Lema, 2003. "Fundamentos del Tipo de Cambio Real en Chile," Documentos de Trabajo 244, Instituto de Economia. Pontificia Universidad Católica de Chile..
    7. Vo, D.H. & Nguyen, H.M. & Vo, A.T. & McAleer, M.J., 2019. "CO2 Emissions, Energy Consumption and Economic Growth," Econometric Institute Research Papers EI2019-11, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    8. Naseem, N.A.M & Tan, Hui-Boon & Hamizah, M.S, 2008. "Exchange Rate Misalignment, Volatility and Import Flows in Malaysia," MPRA Paper 41571, University Library of Munich, Germany.
    9. Md.Yousuf & Raju Ahmed & Nasrin Akther Lubna & Shah Md. Sumon, 2019. "Estimating the Services Sector Impact on Economic Growth of Bangladesh: An Econometric Investigation," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 7(2), pages 62-72, June.
    10. Maswana, Jean-Claude, 2006. "An empirical investigation around the finance-growth puzzle in China with a particular focus on causality and efficiency considerations," MPRA Paper 3946, University Library of Munich, Germany, revised Apr 2006.
    11. Jason Allen & Robert Amano & David P. Byrne & Allan W. Gregory, 2009. "Canadian city housing prices and urban market segmentation," Canadian Journal of Economics, Canadian Economics Association, vol. 42(3), pages 1132-1149, August.
    12. Vassilis Monastiriotis & Cigdem Borke Tunali, 2020. "The Sustainability of External Imbalances in the European Periphery," Open Economies Review, Springer, vol. 31(2), pages 273-294, April.
    13. Sayef Bakari, 2019. "Do Agricultural Raw Materials Imports Cause Agricultural Growth? Empirical Analysis from North Africa," Bulletin of Economic Theory and Analysis, BETA Journals, vol. 4(2), pages 65-77.
    14. Zamani, Mehrzad, 2007. "Energy consumption and economic activities in Iran," Energy Economics, Elsevier, vol. 29(6), pages 1135-1140, November.
    15. Chebbi, Houssem Eddine & Lachaal, Lassaad, 2007. "Agricultural Sector and Economic Growth in Tunisia: Evidence from Co-integration and Error Correction Mechanism," 103rd Seminar, April 23-25, 2007, Barcelona, Spain 9416, European Association of Agricultural Economists.
    16. Michieka, Nyakundi M. & Gearhart, Richard, 2015. "Oil price fluctuations and employment in Kern County: A Vector Error Correction approach," Energy Policy, Elsevier, vol. 87(C), pages 584-590.
    17. Muhammad Shafiullah & Ravinthirakumaran Navaratnam, 2016. "Do Bangladesh and Sri Lanka Enjoy Export-Led Growth? A Comparison of Two Small South Asian Economies," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 17(1), pages 114-132, March.
    18. Xu, Haifeng & Hamori, Shigeyuki, 2012. "Dynamic linkages of stock prices between the BRICs and the United States: Effects of the 2008–09 financial crisis," Journal of Asian Economics, Elsevier, vol. 23(4), pages 344-352.
    19. Muhammad Irfan & Jacob Cherian & Abdul Aziz Abdul Rahman & Akram M. Haddad & Muhammad Safdar Sial & Basit Ali & Talles Vianna Brugni, 2022. "Measuring the Impact of Air Pollutants on Ecological Footprint, Forest Area and Cropland," International Journal of Energy Economics and Policy, Econjournals, vol. 12(1), pages 444-452.
    20. Titus O. Awokuse, 2003. "Is the export-led growth hypothesis valid for Canada?," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 126-136, February.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:epw:develo:v:3:y:2023:i:3:id:15258. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Support Team (email available below). General contact details of provider: https://eu-opensci.org/index.php/ejdevelop .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.