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Long Run Sustainability of Sarawak - West Kalimantan Cross-Border Trade Flows

Author

Listed:
  • Nurul Bariyah
  • Evan Lau
  • Shazali Abu Mansor

    () (Universitas Tanjungpura, Indonesia
    Universiti Malaysia Sarawak, Malaysia)

Abstract

This paper is concerned with the time series behaviour of the cross border trade flows between Sarawak (East Malaysia) - West Kalimantan (Indonesia) 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, yet the study on long-run relationships of cross border trade flows have been largely overlooked. 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.

Suggested Citation

  • Nurul Bariyah & Evan Lau & Shazali Abu Mansor, 2012. "Long Run Sustainability of Sarawak - West Kalimantan Cross-Border Trade Flows," Journal of Developing Areas, Tennessee State University, College of Business, vol. 46(1), pages 165-181, January-J.
  • Handle: RePEc:jda:journl:vol.46:year:2012:issue1:pp:165-181
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    References listed on IDEAS

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    More about this item

    Keywords

    Bilateral Trade Sustainability; Sarawak; West Kalimantan;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • 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; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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