Analysis of Competitiveness Determinants, and Export Development Strategy of Indonesian MSME Products to the ASEAN Market

Abstract

Micro, Small, and Medium Enterprises (MSMEs) are one of the most strategic sectors in boosting the Indonesian economy. This business not only absorbs a large workforce but also contributes to GDP and has proven time and again that this sector can save the Indonesian economy from the crisis. This study aims to (1) identify and analyze the export competitiveness of Indonesian MSMEs;(2) analyze the factors that affect the competitiveness of exports; and (3) analyze and determine a more appropriate strategy for the development of Indonesian MSME exports. To answer the objective of export competitiveness, the RCA, AR, and ECI indices are used. To answer the factors that affect export competitiveness, multiple linear regression models are used. From the results of the study, it is known that based on the calculation of the export competitiveness of Indonesian MSMEs in the ASEAN Market during 2010-2020, it shows that there is a competitive power possessed with an average value of RCA > 1, AR > 0 and the value of ECI-ECI Index>. Based on the regression results of ASEAN economic growth variables, the number of Indonesian MSMEs and export taxes together have a significant influence on Indonesian MSME exports in the ASEAN market.