THE EFFECT OF ECONOMIC OPENNESS, DEMOCRACY, AND INSTITUTIONAL QUALITY ON INDONESIA EXPORTS TO ASEAN PLUS THREE

Wikantioso Wikantioso

Abstract


The ASEAN Charter Agreement and the cooperation of the East Asia Free Trade Area ASEAN+3 provide momentum for ASEAN countries to increase economic openness, strengthen the application of democratic principles, and improve institutional quality to enhance trade cooperation. This study aims to explore the role of economic openness, democracy, and institutional quality in increasing Indonesia's exports to ASEAN countries plus three during the 1996-2017 period using the augmented gravity model. The results showed that the openness of ASEAN+3 to trade (trade% of GDP), democracy, and institutional quality of Indonesia and ASEAN+3 as Indonesia's export destination had positive effects in increasing  Indonesia's exports to ASEAN+3. However foreign direct investment in Indonesia and ASEAN+3 does not affect the export.

Keywords: Indonesia Trade Gravity Model, Economic Openness, Democracy, Governance Institution, Indonesia's export, ASEAN+3


Full Text:

PDF
rticle

References


Abidin, I. S. Z., et al. (2013). The Determinants of Exports between Malaysia and the OIC Member Countries: A Gravity Model Approach. Procedia Economics and Finance, 5, 12-19. Retrieved from www.elsevier.com/locate/procedia.

Acemoglu, D. (2009). Introduction to Modern Economic Growth. New Jersey: Princeton.

Acemoglu, D., & Robinson, J. A. (2012). Why Nation Fail: The Origins of Power, Prosperity, and Poverty. New York: Crown Publisher.

Ahmed, A., Cheng, D. E., & Messinis, G. (2008). The Role of Exports, FDI and Imports in Development: New Evidence from Sub-Saharan African Countries. CSES Working Paper, (39).

Anderson, J. E., & Marcouiller. (2002). Insecurity and the Pattern of Trade: An Empirical Investigation. The Review of Economics and Statistics, 84(2), 342-352.

Anwar, S., & Nguyen, L. P. (2011). Foreign Direct Investment and Trade: The Case of Vietnam. Research in International Business and Finance, 25, 39–52.

Appleyard, D. R., & Field, A. J. (2001). International Economics, 4th Edition. New York: McGraw-Hill Companies, Inc.

ASEAN Secretariat. (2018). ASEAN Key Figure 2018. Jakarta: ASEAN Secretariat.

ASEAN Secretariat. (2018). ASEAN Statistical Yearbook 2018. Jakarta: ASEAN Secretariat.

ASEAN Secretariat. (2018). Overview of ASEAN+3 Cooperation. Retrieved from https://asean.org/asean/external-relations/asean-3/.

ASEAN Secretariat. (2019). The ASEAN Charter. Jakarta: ASEAN Secretariat.

Balding, C. (2010). A re-Examination of The Relation Between Democracy and International Trade. The Journal of International Trade & Economic Development, 1-19.

Barro, R. J. (1999). Determinants of Democracy. Journal of Political Economy, 107(S6), 158-183.

Blanchard, O. (2003). Macroeconomics, 3th Edition. USA: Prentice Hall.

Carceres, A. (2009). Peranan Investasi Asing Langsung terhadap Pertumbuhan Ekonomi di Negara-Negara Asia Timur. Retrieved from http://www.laclolospalos.com.

Cindy, D., et al. (2004). Trade and Democracy. Empirical Investigation. Seminar in June 2004 to The European Trade Study Group (ESTG) (Nottingham, September 2004) and at The AFSE Congress (Paris, September 2004).

Clarke, G. R. G. (2001). How Institutional Quality and Economic Factor Impact Technological Deepening in Deceloping Countries. Journal of International Development, 1097-1118.

Donna, D. R., et al. (2018). Does Democracy Increase Bilateral Trade in MENA Region?. MPRA Paper, (86369). Retrieved from https://mpra.ub.uni-muenchen.de/86369/.

Doyle, E., & Zarzoso, I. M. (2011). Productivity, Trade, and Institutional Quality: A Panel Analysis. Southern Economic Journal, 77(3), 726–752.

Effendi, N., & Setiawan, M. (2014). Ekonometrika Pendekatan Teori dan Terapan. Jakarta: Penerbit Salemba Empat.

Faruq, H. A. (2011). How Institutions Affect Export Quality. Economic Systems, 35, 586-606.

Francois, J., & Manchin, M. (2013). Institution, Infrastructure, and Trade. World Development, 46(C), 165-175.

Galiani, S., & Torrens, G. (2013). Autocracy, Democracy, and Trade Policy. Journal of International Economics, 93(1), 173-193.

Groot, H. L. F. d., et al. (2004). The Institutional Determinants of Bilateral Trade Patterns. KYKLOS, 57(1), 103–124.

Gujarati, N. D., & Porter, D. C. (2009). Basic Economterics Fifth Edition. New York: McGraw-Hill Irwin

Hill, C. W. L. (2003). International Business: Competing in the Global Marketpalce, 4th Edition. New York: McGraw-Hill.

Ikhsan, M. (2003). Reformasi Institusi dan Pembangunan Ekonomi. Working Paper, (1). Jakarta: LPEM UI.

Iqbal, M. S. (2010). Causality Relationship between Foreign Direct Investment, Trade and Economic Growth in Pakistan. Asian Social Science, 6(9), 82–89.

Jawas, M. (2008). Pengaruh Penanaman Modal Asing dan Ekspor Terhadap Pertumbuhan Ekonomi di Negara – Negara Muslim: 2004-2005. Yogyakarta: Fakultas Ekonomi Universitas Islam Indonesia.

Kementerian Perdagangan. (2002). ASEAN Free Trade Area (AFTA). Retrieved from http://www.kemendag.go.id/files/regulasi/2002/01/AFTA.htm pada 29 April 2019.

Kepaptsoglou, K., Karlaftis, M. G., & Tsamboulas, D. (2010). The Gravity Model Specification for Modeling International Trade Flows and Free Trade Agreement Effects: A 10-Year Review of Empirical Studies. The Open Economics Journal, 3, 1-13.

Kojima, K. (1973). A Macroeconomic Approach to Foreign Direct Investment. Hitosubashi Journal of Economics, 14, 1-21.

Kojima, K. (1975). International Trade and Foreign Investment: Substitute or Conmplement. Hitosubashi Journal of Economics, 16, 1-12.

Krisharianto, J., & Hartono, D. (2007). Kajian Hubungan antara Pertumbuhan Ekonomi, Perdagangan Internasional dan Foreign Direct Investment. Jakarta: Fakultas Ekonomi Universitas Indonesia.

Krugman, P. R., et al. (2012). International Economics Theory and Policy 9th Edition. Massachusetts: Addison-Wesley Pearson Publishing Company.

Krugman, P. R., Obstffeld, M. (2000). International Economics Theory and Policy 5th Edition. Massachusetts: Addison-Wesley Pearson Publishing Company.

Krugman, P., et all. (2012). International Economics: Theory and Policy, 9th Edition. Boston: Pearson.

Kuncoro, M. (2006). Ekonomika Pembangunan: Teori, Masalah, dan Kebijakan. Yogyakarta: UPP STIM YKPN.

Kuncoro, M. (2007). Ekonomika Industri Indonesia: Menuju Negara Industri Baru 2030?. Yogyakarta: CV Andi Offset.

Linders, G. J. M., et al. (2005). Cultural and Institutional Determinants of Bilateral Trade Flows. Tinbergen Institute Discussion Paper, 74(3).

Mankiw, N. G. (2016). Macroeconomics, 9th Edition. New York: Worth Publishers.

Mansfield, E. D., et al. (2000). Free to Trade: Democracies, Autocracies, and International Trade. American Political Science Review, 94(2).

Markusen, J. R. (1995). The Boundaries Enterprises and The Theory of International Trade. Journal of Economic Perspectives, 9(2), 169-189.

Mauro, P. (1995). Corruption and Growth. The Quarterly Journal of Economics, 110(3), 681-712.

Milner, H. V., & Kubota, K. (2005). Why The Move to Free Trade? Democracy and Trade Policy in the Developing Countries. International Organization: Cambridge University Press, 59(1), 107-143.

Mohsen, A. S., et al. (2016). Trade Liberalization, Export, and Imports in Syria. Foreign Trade Review, XX(X), 1–12.

Nachrowi, N. D., & Usman, H. (2006). Pendekatan Populer dan Praktis Ekonometrika untuk Analisis Ekonomi dan Keuangan. Jakarta: LPFE Universitas Indonesia.

North, D. (1990). Institution, Institutional Change and Econoic Performance. New York: Cambridge University Press.

Nurachmandani, S. (2009). Fisika 2 untuk SMA/MA Kelas XI. Jakarta: Pusat Perbukuan, Departemen Pendidikan Nasional.

O’Rourke, K. H., & Taylor. (2006). Democracy and Protecsionism. NBER Working Paper, 12250.

Ondo, A. (2017). Trade Openness and Democracy: The Case of Gabon. Modern Economy, 8, 191-198.

Pradiptyo, R., et al. (2015). Naskah Akademik Prakarsa Bulaksumur Anti Korupsi.

Pradiptyo, R., et al. (2019). Naskah Akademik Menghapus Pulau Integritas atau Membangun Kepulauan Berintegritas? Rekomendasi Ekonom Terhadap Pelemahan Penindakan dan Pencegahan Korupsi.

Rahardja, P., & Manurung, M. (2008). Pengantar Ilmu Ekonomi (Mikroekonomi dan Makroekonomi), edisi ketiga. Jakarta: Lembaga Penerbit Fakultas Ekonomi Universitas Indonesia.

Salvatore, D. (2013). International Economics, 11th Edition. USA: Jhon Wiley & Sons, Inc.

Suliswanto, M. S. W. (2016). Tingkat Keterbukaan Ekonomi di Negara Asean-5. Jurnal Neo Bis, 10(1).

Tambunan, T. T. H. (2004). Globalisasi dan Perdagangan Internasional. Bogor: Ghalia Indonesia.

Tjahjono, E. D. (1998). Fundamental Ekonomi, Contagion Effect Dan Krisis Asia. Buletin Ekonomi Moneter dan Perbankan. Jakarta: Bank Indonesia.

Todaro, M. P., & Smith, S. C. (2015). Economic Development 12th Edition. USA: Pearson.

Ullah, M. S., & Yasmeen, F. (2014). FDI and Export Linkage Revisited: The case of Bangladesh. Journal of Economic & Financial Studies, 02(01), 14-19.

Vernon, R. (1966). International Investment and International Trade in the Product Life Cycle. Quarterly Journal of Economics, 190-207.

Wei, Y., & Liu, X. (2001). Foreign Direct Investment in China: Determinan and Impact. Massachusetts: Edward Elgar Publishing, Inc.

Widarjono, A. (2018). Ekonometrika: Pengantar dan Aplikasinya Disertai Panduan Eview Edisi Kelima. Yogyakarta: UPP STIM YKPN.

Williamson, O. E. (1985). The Economic Institutions of Capitalism: Firms, Mrkets, Relational Contracting. New York: Free Press.

Wooldridge, J. M. (2009). Intorductory Econometrics A Modern Approach 5th Edition. South-Western USA: Cengage Learning.

World Bank. (1993). The East Asian Miracle. London: Oxford University Press.

World Bank. (2019). World Development Indicator.

Xuan, N. T., & Xing, Y. (2008). Foreign Direct Investment and Exports, The Experiences of Vietnam. Journal of Economics of Transition, 16(2), 183–197.

Yogatama, A. R., Hastiadi, F. F. (2016). The Role of Democracy and Governance in The Enhancement of Indonesian Export to The Organization of Islamic Coorporation (OIC) Countries. Journal of Economic Cooperation and Development, 37(4), 51-78.

Yu, M. (2010). Trade, Democracy, and the Gravity Equation. Journal of Development Economics, 91, 289–300.

Yudanto, N., Santoso, M. S. (1998). Dampak Krisis Moneter Terhadap Sektor Riil. Bulletin of Monetary Economics and Banking, 1(2). Jakarta: Bank Indonesia.

Yuniarti, D. (2007). Analisis Determinan Perdagangan Bilateral Indonesia Pendekatan Gravity Model. Jurnal Ekonomi Pembangunan, 12(2), 99-109.

Yustika, A. E. (2000). Industrialisasi Pinggiran. Yogyakarta: Pustaka Pelajar.

Yustika, A. E. (2012). Ekonomi Kelembagaan: Paradigma, Teori, dan Kebijakan. Jakarta: Erlangga.

Zhang, Q., & Felmingham, B. (2001). The Relationship between Inward Direct Foreign Investment and China’s Provincial Export Trade. China Economic Review, 12, 82-99.




DOI: https://doi.org/10.20961/aedc.v5i1.53441

Refbacks

  • There are currently no refbacks.


Copyright (c) 2021 Journal of Applied Economics in Developing Countries



Journal of Applied Economics in Developing Countries
Master of Economics and Development Studies, Faculty of Economics and Business
Universitas Sebelas Maret
Jl. Ir Sutami 36 A Surakarta, 57126 Indonesia
Telp: +62271-647481
Email: jurnalaedc@gmail.com