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This study uses a gravity model to analyze the impact of the ASEAN-Japan Comprehensive Economic Partnership (AJCEP) agreement on total Indonesian exports and to analyze the occurrence of trade creation or trade diversion. The data used in this study is panel data, and the period chosen for this study is from the year 2000 to 2015, consisting of 16 countries. The result finds that the coefficient value of the FTA dummy is 0.207. This positive relationship indicates that there is a trade creation in AJCEP member countries and non AJCEP members. Therefore, it indicates that the welfare of member states and non AJCEP members. Total GDP, the real exchange rate is positively correlated, and GDP per capita difference and distance are negatively related to total Indonesian exports.
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In-Text Citation: (Aprilia et al., 2020)
To Cite this Article: Aprilia, G. T., Handoyo, R. D., Ridzuan, A. R., & Razak, M. I. M. (2020). Impact of Trade Creation and Trade Diversion in ASEAN-Japan Comprehensive Economic Partnership (AJCEP). International Journal of Academic Research in Business and Social Sciences, 10(5), 372–380.
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