Recognition of the competitiveness of various export commodities is important in the design of industrial policies which shapes a country's structural transformation. The commonly used approach is the Revealed Comparative Advantage (RCA) which was introduced by Balassa in 1965. Over the years, Balassa's RCA has received a lot of criticism with improvement effort related to its consistency (ranking bias). This study therefore aims to examine the possibility of improving the RCA prediction power, while adhering to the principle of simplicity in the calculation as well as convenience in dealing with data availability. The calculation is conducted by selecting the products included in the analysis using the two steps approach. This examination revealed that the selection limited to top 250 export products (from 1,259 products in HS 4-digit), it is able to correct (restore) the position of Indonesian manufacturing sector. As a competitive sector (RCA> 1) it reflects the position of the sector as top 10 export, based on its share (export value). This approach also provided a new hint into Indonesia's export in Chinese market, especially after the implementation of the ASEAN-China Free Trade Agreement in 2010.
North Sumatra is one of the provinces in Indonesia with high levels of economic openness. On average, since 2000, the contribution of export value to the Regional GDP reached 40 % and import value of 28%. Using Granger causality method, the study aims to investigate causal relations between international trade and North Sumatra’s local economy especially the impact of exports and imports on Regional GDP, Regional GDP per capita, employment and poverty reduction. The empirical results of present study discovered that (i) the exports and imports respectively have positive and significant impact on regional GDP, regional GDP per capita, employment and poverty reduction, (ii) there is a bi-directional causality between imports and regional GDP, where GDP growth rate would boost imports over-proportionally, (iii) both exports and imports are dominated by intermediate goods as the raw materials for further processing industry, (iv) export structure which is dominated by the agricultural-based intermediate good is proverty-reduction through factor market in the upstream sector making the rural peoples benefited from the exports.
Abstract. Indonesia is a disaster prone country. One of the geo physical disaster is the prolonged of Mount Sinabung Eruption in Karo Regency, North Sumatra. This area is famous for horticultural (vegetable and fruit) producer in the region. The eruption has displaced people, destroyed infrastructure and livelihood. This research aims: (i) to investigate the magnitude of the economic losses, (ii) to find out impact on agricultural production and (iii) to investigate the adaptation pattern undertaken by farmers. The results of research showed that (i) the extent of losses on the regional level is bigger than the annual local government budget, whereas the feasibility of farm business deteriorated significantly, (iii) the disaster has jeopardized village self help organization, worsened access to farm credit as well as caused labour shortage in agriculture. Based on empirical finding, recommendation for the rehabilitation and mitigation is proposed.
Objectives of the study are: (1) to estimate the influence of input value and labor expenditure on the output of micro and small industries in Indonesia, (2) to analyze the form of translog production function that is compatible with micro and small industries in Indonesia. The analytical method used is descriptive method and analysis of translog production functions with scenarios: linear translog function, complete second-order or quadratic linear translog function, and linear translog function with interaction. Results showed that (1) the function of linear translog production with interaction was more suitable used to estimate the production output of micro and small industries in Indonesia, (2) input value and labor expenditure had a positive and significant effect on output values, (3) micro-industry enterprises more emphasis on the allocation of larger workforce, while small-scale industry emphasizes greater allocation of input value, (4) the allocation of input value and labor expenditure are more efficient in micro-industries compared to small-scale industries.
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