Journal Screenshot

International Journal of Academic Research in Business and Social Sciences

Open Access Journal

ISSN: 2222-6990

Impact of Trade Liberalization on Indonesian Export to South Korea, Japan, and China

Silva Nur Rizha Fajriyanti, Rossanto Dwi Handoyo, Abdul Rahim Ridzuan, Mohamad Idham Md Razak

http://dx.doi.org/10.6007/IJARBSS/v10-i5/7247

Open access

One of the characteristics of an open economy is the contribution of international trade in the economy. Numerous trade agreements have been made to reduce international trade barriers. This study aims to determine the impact of trade liberalization on Indonesian exports to three major trading partners in East Asia, South Korea, Japan and China. The impact of liberalization on exports was examined using a gravity model and a panel with a period of 20 years. The independent variables used in this study are tariff, degree of openness, population, exchange rate, GDP, and distance. The results of this study indicate that trade liberalization, viewed from the tariff and degree of openness has a significant effect on exports. Other influencing variables are GDP, population, and exchange rate. The variable of distance does not affect Indonesian exports to the three trading partner countries.

Ahmed, S., Appendino, M., & Michele, R. (2015). Depreciations without exports? Policy Research Working Paper World Bank.
Carbaugh, & Robert, J. (2008). International Economics. Eleventh Edition. Mason: Thomson Higher Education.
Clark, D. P. (2007). Distance, production, and trade. The Journal of International Trade & Economic Development, 16(3), 359-371.
Dabaere, P., & Shalah, M. (2010). Do tariffs matter for the extensive margin of international trade? An empirical analysis. Journal of International Economics, 81,163-169.
Fang, W., YiHao, L., and Henry, T. (2005). Export promotion through exchange rate policy: Exchange rate depreciation or stabilization?. Department of Economics Working Paper Series.
Ghazalian, & Pascal, L. (2015). On the magnitude of the geographic distance effect on primary agricultural and processed food trade. Agribusiness, 31(2), 148-170.
Gujarati, D. N., & Dawn, C. P. (2012). Basic Econometrics. Second book.
5th edition. New York: McGraw-Hill.
Hoque, M. M., & Yusop, Z. (2010). Impacts of trade liberalisation on aggregate import in Bangladesh: An ARDL bounds test approach. Journal of Asian E, 21, 37-52.
Hovey, C., & Rehmke, G. (2008). The Complete Ideal’s Guides: Global Economics. Jakarta: Prenada Media Group.
Junko, S., & Kiyotaka, S. (2015). Abenomics, yen depreciation, trade deficit, and export competitiveness. RIETI Discussion Paper Series 15-E- 020.
Khan, U. I., & Kalirajan, K. (2011). The impact of trade costs on exports: An empirical modeling. Economic Modelling, 28, 1341-1347.
Kleinert, J., & Spies, J. (2011). Transport cost in international trade. IAW Discussion Papers 74.
Krugman, P. R., Obstfeld, M., & Melitz, M. J. (2012). International economics theory and policy. Ninth Edition. Harlow: Pearson Education Limited.
MapCrow. (2017). Retrieved on Sept 24, 2017 from http://www..mapcrow.info
Milner, C., Morrissey, O., & Rudaheranwa, N. (1998). Protection, trade policy and transport costs: Effective taxation of Ugandan exporters. Credit Discussion Paper 7.
Narayanan, G. B., & Khorana, S. (2014). Tariff escalation, export shares and economy-Wide welfare: A computable general equilibrium approach. Economic Modelling, 41, 109-118.
Salvatore, D. (1996). International Economics, 5th edition. Vol 1. Jakarta: Penerbit Erlangga.
Salvatore, D. (2011). International Economics: Trade and Finance. Tenth Edition. Singapore: John Wiley & Sons (Asia) Pte Ltd.
Salvatore, D. (2014). International Economics. 9th edition. Book 1. Jakarta: Penerbit Salemba Empat.
Statistics Indonesia. (2017). Retrieved on Sept 24, 2017 from: https://bps.go.id
Xiang, H., Kuang, Y., & Li, C. (2016). Impact of the China– Australia FTA on global coal production and trade. Journal of Policy Modelling, 29(1), 65-78.
World Bank. (2017). Retrieved on Sept 24, 2017 from https://data.worldbank.org
World Integrated Trade Solution. (2017). Retrieved on Sept 24, 2017 from http://wits.worldbank.org
World Trade Organization. (2017).Retrieved on Sept 24, 2017 from https://www.wto.org
Yang, S., & Zarzoso, I. M. (2014). A panel data analysis of trade creation and trade diversion effect: The case of ASEAN-China free trade srea. China Economic Review, 29, 138-151.

In-Text Citation: (Fajriyanti et al., 2020)
To Cite this Article: Fajriyanti, S. N. R., Handoyo, R. D., Ridzuan, A. R., & Razak, M. I. M. (2020). Impact of Trade Liberalization on Indonesian Export to South Korea, Japan, And China. International Journal of Academic Research in Business and Social Sciences, 10(5), 762–769.