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Gravity Modeling Approach for Indonesia's Exports with ten Asian Countries

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  • K. Karno

Abstract

The main objective of this research is to study the opportunities and the constraints of Indonesian export sector to various countries in Asia using the Gravity Model approach.Annual panel data is used to estimate and evaluate the empirical results for the period 1987-2014. We examine the opportunities and the constraints of the Indonesia’s export flows between different locations from Indonesia to other Asian countries.The results showed that the market size, the investment level, the exchange rates and the inflation rate in trading partner countries can be considered the signals for an export opportunity for Indonesia.Geographical distance is a factor that has significant influence in Indonesia's trade with other Asian countries.

Suggested Citation

  • K. Karno, 2017. "Gravity Modeling Approach for Indonesia's Exports with ten Asian Countries," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 3-20.
    • Handle: RePEc:ers:ijebaa:v:v:y:2017:i:3:p:3-20
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    More about this item

    Keywords

    Gravity models; export sector; international finance.;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F37 - International Economics - - International Finance - - - International Finance Forecasting and Simulation: Models and Applications

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