THRESHOLD OF REAL EXCHANGE RATE AND THE PERFORMANCE OF MANUFACTURING INDUSTRY IN INDONESIA

Ndari Surjaningsih, Novi Maryaningsih and Myrnawati Savitri
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Myrnawati Savitri: Bank Indonesia

Bulletin of Monetary Economics and Banking, 2014, vol. 16, issue 4, 347-368

Abstract: This paper analyzes the presence of the threshold of the real rupiah exchange rate which influences the profitability of manufacturing industry in Indonesia. By using a non-dynamics panel data over medium and large scale companies during 2001-2009, we found the threshold of 82.4 for the real rupiah exchange rate (REER). The REER index ranging from 82.24 to 101.13 with the change value between -5.01% and 20.09% (yoy) is secure for the profitability of Indonesian manufacturing industry. This paper also conform the significant affect of Total Factor Productivity on firm’s profitability.

Keywords: Profitability; Manufacturing industry; exchange rate (search for similar items in EconPapers)
JEL-codes: D21 F1 L6 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:16:y:2014:i:4i:p:347-368

DOI: 10.21098/bemp.v16i4.450

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