IDEAS home Printed from https://ideas.repec.org/a/uii/journl/v8y2016i2p148-158.html
   My bibliography  Save this article

Elasticity and competitiveness of Indonesia’s palm oil export in India market

Author

Listed:
  • Awan Setya Dewanta
  • Riza Noer Arfani
  • Erfita

    (3 Department of Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia.
    Graduate School of International Relations, Ritsumeikan University, Kyoto, Japan.
    3 Department of Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia.)

Abstract

This study examines the elasticity and competitiveness of Indonsia’s palm oil export in the India market, 1990-2014. The methods used are Error Correction Model (ECM) and Revealed Comparative Advantage (RCA) approach. The results shows that the price is inelastic in short-term but it is elastic in long-term. The income and exchange rate are elastic in the long-term. There is also a decline in competitiveness in the market India. These findings also demonstrate that palm oil is normal goods and can be easily substituted with the same products of other countries or other vegetable oils. It threatens the Indonesian palm oil competitiveness in the Indian market.

Suggested Citation

  • Awan Setya Dewanta & Riza Noer Arfani & Erfita, 2016. "Elasticity and competitiveness of Indonesia’s palm oil export in India market," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 8(2), pages 148-158, April.
  • Handle: RePEc:uii:journl:v:8:y:2016:i:2:p:148-158
    DOI: 10.20885/ejem.vol8.iss2.art7
    as

    Download full text from publisher

    File URL: https://journal.uii.ac.id/JEP/article/download/6218/5767
    Download Restriction: no

    File URL: https://journal.uii.ac.id/JEP/article/view/6218/5767
    Download Restriction: no

    File URL: https://libkey.io/10.20885/ejem.vol8.iss2.art7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kapur, Muneesh & Mohan, Rakesh, 2014. "India’s Recent Macroeconomic Performance: An Assessment and the Way Forward," India Policy Forum, National Council of Applied Economic Research, vol. 10(1), pages 205-295.
    2. Faini, Riccardo & Clavijo, Fernando & Senhadji-Semlali, Abdel, 1992. "The fallacy of composition argument : Is it relevant for LDCs' manufactures exports?," European Economic Review, Elsevier, vol. 36(4), pages 865-882, May.
    3. Carmen M. Reinhart, 1995. "Devaluation, Relative Prices, and International Trade: Evidence from Developing Countries," IMF Staff Papers, Palgrave Macmillan, vol. 42(2), pages 290-312, June.
    4. Egwuma, Henry & Shamsudin, Mad Nasir & Mohamed, Zainalabidin & Kamarulzaman, Nitty Hirawaty & Wong, Kelly Kai Seng, 2016. "A Model For The Palm Oil Market In Nigeria: An Econometrics Approach," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(2), pages 1-17, April.
    5. Ostry, Jonathan D. & Rose, Andrew K., 1992. "An empirical evaluation of the macroeconomic effects of tarrifs," Journal of International Money and Finance, Elsevier, vol. 11(1), pages 63-79, February.
    6. repec:nca:ncaerj:v:10:y:2014:i:1:p:205-295 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Deddy Romulo Siagian & Rajendra P. Shrestha & Sangam Shrestha & John K. M. Kuwornu, 2019. "Factors Driving Rice Land Change 1989–2018 in the Deli Serdang Regency, Indonesia," Agriculture, MDPI, vol. 9(9), pages 1-22, August.
    2. Nur Ain Mohd Hassan & Kalsom Zakaria & Kamalrudin Mohamed Salleh & Siti Mashani Ahmad, 2023. "An empirical analysis of Malaysian palm oil export to world major palm oil importing countries:," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 33(1), pages 61-73.
    3. Abubakar, Fahrurrazi & Masih, Mansur, 2018. "Palm oil export : is it price led or exchange rate led? evidence from Malaysia," MPRA Paper 111229, University Library of Munich, Germany.
    4. Olabisi, Michael & Tschirley, David L. & Nyange, David & Awokuse, Titus, 2018. "The Challenge of Substituting Sunflower Oil for Imported Palm Oil: Evidence from Tanzania," Feed the Future Innovation Lab for Food Security Policy Research Papers 275677, Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Günçavdı, Öner & Suna Kayam, Saime, 2017. "Unravelling the structure of Turkish exports: Impediments and policy," Journal of Policy Modeling, Elsevier, vol. 39(2), pages 307-323.
    2. Bernardina Algieri, 2004. "Price and Income Elasticities of Russian Exports," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 1(2), pages 175-193, December.
    3. Abdelhak Senhadji, 1998. "Time-Series Estimation of Structural Import Demand Equations: A Cross-Country Analysis," IMF Staff Papers, Palgrave Macmillan, vol. 45(2), pages 236-268, June.
    4. Rupa Duttagupta & Antonio Spilimbergo, 2004. "What Happened to Asian Exports During the Crisis?," IMF Staff Papers, Palgrave Macmillan, vol. 51(1), pages 1-4.
    5. Bernardina Algieri, 2011. "Modelling export equations using an unobserved component model: the case of the Euro Area and its competitors," Empirical Economics, Springer, vol. 41(3), pages 593-637, December.
    6. Spilimbergo, Antonio & Vamvakidis, Athanasios, 2003. "Real effective exchange rate and the constant elasticity of substitution assumption," Journal of International Economics, Elsevier, vol. 60(2), pages 337-354, August.
    7. Ariel A. Barraud & Author-Name: Ariel A. Barraud, 2011. "Exploring trade flows between MERCOSUR and the EU: what does an export demand function tell us?," Economic Analysis Working Papers (2002-2010). Atlantic Review of Economics (2011-2016), Colexio de Economistas de A Coruña, Spain and Fundación Una Galicia Moderna, vol. 2, pages 1-1, December.
    8. Sanjesh Kumar, 2009. "Estimating Export Equations for Developing Countries," The IUP Journal of Applied Economics, IUP Publications, vol. 0(2), pages 17-28, March.
    9. Metiu, Norbert, 2021. "Anticipation effects of protectionist U.S. trade policies," Journal of International Economics, Elsevier, vol. 133(C).
    10. Cook, David & Devereux, Michael B., 2006. "External currency pricing and the East Asian crisis," Journal of International Economics, Elsevier, vol. 69(1), pages 37-63, June.
    11. Xu, Xinpeng, 2002. "The dynamic-optimizing approach to import demand: a structural model," Economics Letters, Elsevier, vol. 74(2), pages 265-270, January.
    12. Sokolova, Maria V., 2016. "Exchange Rates, International Trade and Growth: Re-Evaluation of Undervaluation," Conference papers 332790, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    13. Amna Nazeer & Wu Jun & Khuram Shafi & Liu Yan Yan, 2015. "Fluctuation of Yuan/Dollar: Time Series Co Integration Analysis," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(1), pages 317-326, January.
    14. Shahe Emran, M. & Shilpi, Forhad, 1996. "Foreign exchange rationing and the aggregate import demand function," Economics Letters, Elsevier, vol. 51(3), pages 315-322, June.
    15. Alberto Bagnai & Arsène Rieber & Thi Anh-Dao Tran, 2015. "Economic growth and balance-of-payments constraint in Vietnam," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 38(4), pages 588-615, November.
    16. Michael J. Dueker, 1995. "Tariffs and asset market structure: some basic comparative dynamics," Working Papers 1995-009, Federal Reserve Bank of St. Louis.
    17. Martha Misas & Maria Teresa Ramirez, 2004. "Long-run income and price elasticities of demand for Colombian nontraditional exports: a multivariate cointegration framework," Applied Economics, Taylor & Francis Journals, vol. 36(9), pages 931-938.
    18. Jarko Fidrmuc & Pavel Ciaian & d'Artis Kancs & Jan Pokrivcak, 2013. "Credit Constraints, Heterogeneous Firms and Loan Defaults," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 53-68, May.
    19. Mamoru Nagano, 2005. "Investment And Export-Led Industrialization: Financial Constraints And Export Promotion Of East Asian Firms," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 30(1), pages 81-93, June.
    20. Robert A. Blecker & Arslan Razmi, 2010. "Export-led Growth, Real Exchange Rates and the Fallacy of Composition," Chapters, in: Mark Setterfield (ed.), Handbook of Alternative Theories of Economic Growth, chapter 19, Edward Elgar Publishing.

    More about this item

    Keywords

    Elasticity; Competitiveness; ECM; RCA; palm oil.;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uii:journl:v:8:y:2016:i:2:p:148-158. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ana Yuliani (email available below). General contact details of provider: https://journal.uii.ac.id/JEP/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.