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Trade Impediments in Indonesia

Author

Listed:
  • Suryanta, Barli

    (School of Business and Management Bandung Institute of Technology (ITB) Indonesia)

  • Patunru, Arianto Arif

    (Arndt-Corden Department of Economics, Australian National University, Australia)

Abstract

This study investigates the effect of various types of trade impediments on Indonesia's trade flows. We categorize tariff measures, non-tariff measures (NTMs), and the lack of trade facilitation measures into at-the-border and behind-the-border barriers. A gravity model is applied to a panel dataset covering 177 of Indonesia's trade partners from 2007 to 2016. This study shows that Indonesia's trade protection remains high, particularly due to the increasing use of NTMs. Furthermore, the lack of trade facilitation also contributes to increasing trade costs, particularly those associated with trade logistics and administration. We also demonstrate why feasible generalized least square is preferable to ordinary least squares and pseudo-Poisson maximum likelihood when estimating a gravity model using panel data that are auto-correlated and contain a large number of zero observations.

Suggested Citation

  • Suryanta, Barli & Patunru, Arianto Arif, 2023. "Trade Impediments in Indonesia," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 38(2), pages 247-277.
    • Handle: RePEc:ris:integr:0874
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    More about this item

    Keywords

    Indonesian economy; non-tariff measures; trade facilitation; gravity model;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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