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Effects of an Export Tax on Competitiveness: The Case of the Indonesian Palm Oil Industry

  • Mohamad F. Hasan

    (Department of Agricultural Economics, University of Kentucky)

  • Michael R. Reed

    (Department of Agricultural Economics, University of Kentucky)

  • Mary A. Marchant

    (Department of Agricultural Economics, University of Kentucky)

This research analyzes the dynamic effects of an export tax on export performance of the Indonesian palm oil industry using time series analysis. The vector autoregressive model results show exports fell dramatically with the imposition of the tax. This research showed that the imposition of an export tax has long-lasting, negative effects on competitiveness of the Indonesian palm oil industry. The variance decomposition reveals that more than 83% of the variation in the forecast error of the net export shares is explained by its own shock, and 8.6% and 8.4% are explained by export tax and relative export prices, respectively.

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Article provided by Chung-Ang Unviersity, Department of Economics in its journal Journal Of Economic Development.

Volume (Year): 26 (2001)
Issue (Month): 2 (December)
Pages: 77-90

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Handle: RePEc:jed:journl:v:26:y:2001:i:2:p:77-90
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  1. Steven S. Vickner & Stephen P. Davies, 2000. "Estimating strategic price response in a product-differentiated oligopoly: The case of a domestic canned fruit industry," Agribusiness, John Wiley & Sons, Ltd., vol. 16(2), pages 125-140.
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