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Effects of an Export Tax on Competitiveness: The Case of the Indonesian Palm Oil Industry

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  • Mohamad F. Hasan

    (Department of Agricultural Economics, University of Kentucky)

  • Michael R. Reed

    (Department of Agricultural Economics, University of Kentucky)

  • Mary A. Marchant

    (Department of Agricultural Economics, University of Kentucky)

Abstract

This research analyzes the dynamic effects of an export tax on export performance of the Indonesian palm oil industry using time series analysis. The vector autoregressive model results show exports fell dramatically with the imposition of the tax. This research showed that the imposition of an export tax has long-lasting, negative effects on competitiveness of the Indonesian palm oil industry. The variance decomposition reveals that more than 83% of the variation in the forecast error of the net export shares is explained by its own shock, and 8.6% and 8.4% are explained by export tax and relative export prices, respectively.

Suggested Citation

  • Mohamad F. Hasan & Michael R. Reed & Mary A. Marchant, 2001. "Effects of an Export Tax on Competitiveness: The Case of the Indonesian Palm Oil Industry," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 26(2), pages 77-90, December.
    • Handle: RePEc:jed:journl:v:26:y:2001:i:2:p:77-90
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    References listed on IDEAS

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    1. Darryl Holden & Roger Perman, 1994. "Unit Roots and Cointegration for the Economist," Palgrave Macmillan Books, in: B. Bhaskara Rao (ed.), Cointegration, chapter 3, pages 47-112, Palgrave Macmillan.
    2. Steven S. Vickner & Stephen P. Davies, 2000. "Estimating strategic price response in a product-differentiated oligopoly: The case of a domestic canned fruit industry," Agribusiness, John Wiley & Sons, Ltd., vol. 16(2), pages 125-140.
    3. Takamasa Akiyama, 1992. "Is there a case for an optimal export tax on perennial crops?," Policy Research Working Paper Series 854, The World Bank.
    4. Stephen Marks & Donald Larson & Jacqueline Pomeroy, 1998. "Economic Effects of Taxes on Exports of Palm Oil Products," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 34(3), pages 37-58.
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    Cited by:

    1. Antoine Bouët & Carmen Estrades & David Laborde, 2014. "Differential Export Taxes along the Oilseeds Value Chain: A Partial Equilibrium Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(3), pages 924-938.
    2. Zhe Chen & Zhongzhong Hu & Kai Li, 2021. "The spillover effect of trade policy along the value Chain: Evidence from China's rare earth‐related sectors," The World Economy, Wiley Blackwell, vol. 44(12), pages 3550-3582, December.
    3. Thomas, Marcelle & Orden, David, 2004. "Agricultural policies in Indonesia," MTID discussion papers 78, International Food Policy Research Institute (IFPRI).
    4. Rifin, Amzul & Nauly, Dahlia, 2013. "The Effect of Export Tax on Indonesia’s Cocoa Export Competitiveness," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 152175, Australian Agricultural and Resource Economics Society.
    5. Amir, Hidayat, 2013. "Economic Impact Analysis of the 2012 Indonesia Mineral-Export Tax Policy: A CGE Approach," MPRA Paper 62669, University Library of Munich, Germany.
    6. Olga Solleder, 2013. "Panel Export Taxes (PET) Dataset: New Data on Export Tax Rates," IHEID Working Papers 07-2013, Economics Section, The Graduate Institute of International Studies.
    7. Bentivoglio, D. & Bucci, G. & Finco, A., 2018. "Factor affecting the palm oil boom in Indonesia: a time series analysis," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277129, International Association of Agricultural Economists.
    8. Amzul Rifin, 2015. "The Impact of Export Tax Policy on Cocoa Farmers and Supply Chain," The International Trade Journal, Taylor & Francis Journals, vol. 29(1), pages 39-62, March.

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