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Threshold Of Real Exchange Rate And The Performance Of Manufacturing Industry In Indonesia

Author

Listed:
  • Ndari Surjaningsih
  • Novi Maryaningsih
  • Myrnawati Savitri

    (Bank Indonesia)

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.

Suggested Citation

  • Ndari Surjaningsih & Novi Maryaningsih & Myrnawati Savitri, 2014. "Threshold Of Real Exchange Rate And The Performance Of Manufacturing Industry In Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 16(4), pages 347-368, April.
  • Handle: RePEc:idn:journl:v:16:y:2014:i:4i:p:347-368
    DOI: https://doi.org/10.21098/bemp.v16i4.450
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    1. repec:idn:journl:v:13:y:2010:i:2:p:1-34 is not listed on IDEAS
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    More about this item

    Keywords

    Profitability; Manufacturing industry; exchange rate;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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