Analysis of the Determinants of Indonesia’s Exports with ASEAN Countries and Seven Trading Partner Countries Using the Gravity Model

Analysis of the Determinants of Indonesia’s Exports with ASEAN Countries and Seven Trading Partner Countries Using the Gravity Model

  • Akhmad Jayadi , Department of Economics, Faculty of Economics and Business, Universitas Airlangga, Indonesia
  • Velizha Ayu Retnosari , Department of Economics, Faculty of Economics and Business, Universitas Airlangga, Indonesia

Keywords:

Exports, gravity models, Generalized Method of Moment (GMM)

Abstract

This study aims to analyze the influence of GDP, population, distance, similarity index of economic size, and exchange rate on Indonesian exports with ASEAN countries and 7 trading partners (Japan, South Korea, India, China, Australia, New Zealand, Pakistan). This study uses the Generalized Method of Moment (GMM) method. The results of this study indicate that there is an influence between the independent variable and the dependent variable. This is indicated by the variable Indonesian GDP, the GDP of trading partner countries, the population of trading partner countries, the similarity index of the economic size of the two countries has a positive and significant effect on Indonesian exports, while the variable distance between the two countries and the Indonesian currency exchange rate against the currency trading partner countries have a negative and significant effect on Indonesia’s exports in the period 2008 to 2017.

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