Industrial Capital Intensity and Comparative Advantages Dynamism of Indonesian Export Products

Abstract

The development of new trade theory which incorporates the interaction between trade and international capital flows indicates if the possibility of changes in a country's comparative advantage due to the opening of international capital flows. International capital flows allow for changes in the industrial structure of a country depends on the composition of the products produced in that country. More capital-intensive types of products produced by a country, the greater the need for capital and the higher marginal rate of capital that can be given to attract greater international capital flows. Therefore, a comparative advantage should be seen as dynamic rather than static. As a country with large population, Indonesia tends to specialize in labor-intensive products. The other hand, efforts to attract foreign direct investment are very intensively conducted. The estimation results indicate if there was a shift in the pattern of industrial specialization Indonesia, from labor-intensive tends toward capital intensive. Keywords: neoclassical models, capital movements, business, comparative advantage JEL Classification: F11, F21, F23, L60 Intensitas Modal Industri dan Dinamisme Keunggulan Komparatif Produk Ekspor Indonesia AbstrakPerkembangan dalam teori perdagangan internasional baru yang menunjukkan adanya interaksi antara perdagangan barang dengan aliran modal internasional mengindikasikan adanya kemungkinan perubahan keunggulan komparatif sebuah negara. Adanya aliran modal internasional memungkinkan terjadinya perubahan dalam struktur industri sebuah negara yang tergantung pada komposisi produk yang dihasilkan di negara tersebut. Jika sebuah negara semakin memiliki struktur industri yang bersifat padat modal, maka semakin besar kebutuhan akan modal dan semakin tinggi marginal rate of capital yang bisa diberikan untuk menarik semakin besar modal internasional untuk mengalir masuk. Karena itu, sifat keunggulan komparatif suatu negara seharusnya lebih bersifat dinamis, dibandingkan dengan statis. Sebagai sebuah negara yang memiliki populasi besar, Indonesia akan cenderung berspesalisasi dalam produk-produk yang bersifat padat karya. Di sisi lain, upaya untuk menarik aliran modal internasional semakin gencar dilakukan. Hasil estimasi mengindikasikan jika telah terjadi perubahan pola spesialisasi industri di Indonesia, dari yang awalnya bersifat padat tenaga kerja menjadi cenderung ke arah padat modal.

Asean-China Fta and the Impact on Indonesian Manufacturing Industry

“…In the case of manufacturing petroleum products, Indonesia has a comparative advantage but the calculated RCA index value is decreasing (Table 13). These results somehow confirm what has been suggested by Setyari, Widodo, and Purnawan (2015), that Indonesia has a strong comparative advantage in the wood industry while the textile and garments sector's competitiveness declined. As for Indonesia's position in the regional market (ASEAN+China+Indonesia), the structure of the RCA index is slightly different (Table 13).…”

Impact of Reduced Tariff Rate Under Fta Scheme on Import Quality Upgrading

“…The results of Khandelwal's research (2010) also show that the size of the quality ladder is positively correlated with industrial capital intensity and productivity. In Indonesia, the automotive industry is an industry that is classified as capital intensive (Setyari et al, 2015) so that unit value can be used as a good proxy for the quality of Indonesian automotive products. Therefore, this study uses the unit value as a measure of quality.…”