Effect of Comparative Advantages, The Real Exchange Rate, Per Capita Income to Indonesia Export Value in ASEAN

Abstract

One of the formulas in economics describes the trade (exports and imports) is one of the key economic growth of a country, in addition to consumption, investment and government spending. The goal of this study was able to formulate how much influence and relationship variables that have been determined are able to influence the export value of Indonesia in ASEAN. Variables contained in this research is the export value of Indonesia (V) as the dependent variable, then the comparative advantage (RCA), the real exchange rate (REER) and per capita income export destination countries (GDPP) as independent variables. This study uses regression analysis and panel data RCA, and found that based on the index of revealed comparative advantage, the pattern of Indonesia's comparative advantage in international trade is so dynamic. The data used is secondary data and panel data is the combination of time series and cross section (Philippines, Malaysia, Singapore, Thailand, and Vietnam) year period from 2005 to 2014, resulting in 50 observations. Overall results of the analysis of comparative advantage over Indonesia's trade with major partners at regional and country still shows a pattern that is consistent with the law of comparative advantage. Furthermore, the econometric estimation of equation exports resulted in the fact that the comparative advantage, the real exchange rate, and foreign demand, as reflected by the GDP per capita significantly affect Indonesia's export performance in ASEAN.

Keywords: Comparative Advantage, The Real Exchange Rate, Per capita Income, Exports, Endowment Factor.