Impact of exchange rates on exports from Indonesia's sub-national economies: an empirical analysis

Khee Giap Tan, Mulya Amri and Nursyahida Ahmad

International Journal of Economic Policy in Emerging Economies, 2020, vol. 13, issue 2, 85-106

Abstract: This paper presents an examination of the impact of Indonesia's cost competitiveness, broadly represented by the country's real effective exchange rate (REER), on the value of exports from Indonesia's provinces. Our focus on Indonesia is intended to fill the knowledge gap on the world's 16th largest economy and fourth most populous country, where decentralisation efforts have resulted in increasing exports from its peripheral regions. Using panel fixed-effects model on provincial exports data covering 2000 to 2013, we find that exchange rate depreciation is positively and significantly associated with provincial exports, and exchange rate volatility tends to be negatively associated with exports. This implies that the export performance of a province depends upon not just managing cost competitiveness through the exchange rate regime but also other economic considerations such as the relative competitiveness of the provinces.

Keywords: Indonesia; provincial exports; exchange rate; competitiveness. (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=107927 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijepee:v:13:y:2020:i:2:p:85-106

Access Statistics for this article

More articles in International Journal of Economic Policy in Emerging Economies from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().