THE DYNAMICS SPILLOVER OF TRADE BETWEEN INDONESIA AND ITS COUNTERPARTS IN TERMS OF AFTA 2015 : A MODIFIED GRAVITY EQUATION APPROACH
The forthcoming 2015, ASEAN is being confident to implement ASEAN Free Trade (AFTA). The existence of AFTA is to outstrip trade liberalization due to augment trade volume significantly and transaction easing as well among the members of AFTA, mainly by inducing lower tariffs some certain commodities up to 0%. This paper is conducted in order to examine on what prominent commodity of Indonesia compared to its counterparts namely Brunei, Malaysia, Philippines, Singapore and Thailand. These Indonesia counterparts are selected therefore they were the founding of ASEAN. Furthermore, this paper utilizes a modified Gravity Equation model. This model has an effort to estimate the significance of some parameters of variable from model equation. Thus, it can be detected that what are from these variables from a model equation being as a key determination factor to influence trading transactions. This paper also assesses the adjusted R-squared due to which Indonesia counterparts incur some vantage points as well as beneficial for Indonesia in terms of AFTA. The novelty contribution of this paper is to reveal the dynamics trade spillover between Indonesia some strategic sectors and its counterparts. By doing so, Indonesia is expected to be a dominant player in AFTA 2015 and taking some advantageous from AFTA into Indonesia account.
Keywords: AFTA 2015, a modified gravity equation model, analysis of data panelJEL Classification: C33, C51, F15
ASEAN Economic Community Blueprint ASEAN Economic Community Blueprint. ASEAN Economic Community Blueprint “ASEAN Secretariat”, Jakarta, January 2008.
ASEAN Economic Community Chartbook. ASEAN Economic Community Chartbook “ASEAN Secretariat”, Jakarta, September 2009.
ASEAN. “ASEAN Free Trade Area (AFTA Council)” Available at http://www.asean.org/19585.htm., Accessed on October 2010.
Bali and Indonesia on the Net Bali and Indonesia on the Bali and Indonesia on the Net. Available at http://www.indo.com/distance, Accessed on March 2010.
Balassa, Bela. Balassa, Bela “Trade Creation and Trade Diversion in the EEC”, Economic Journal, No. 77, p1-21, 1967.
Brada, Josef C dan Mende Brada, Josef C dan Mendez, Jose A z, Jose A. “Economic Integration Among Developed, Developing and Centrally Planned Economies: A Comparative Analysis”, The Review of Economics and Statistics, 1985.
Calvo-Pardo, Hector., Freund, Caroline., dan Ornelas, Emanuel Calvo-Pardo, Hector., Freund, Caroline., Calvo-Pardo, Hector., Freund, Caroline., dan Ornelas, Emanuel dan Ornelas, Emanuel. “The ASEAN Free Trade Agreement: Impact on Trade Flows and External Trade Barriers”. Policy Research Working Paper The World Bank Development Research Group Trade and Integration Team, 2009.
City Distance Tool City Distance Tool. City Distance Tool Available at http://www.geobytes.com/citydistancetool.htm, Accessed on March 2010.
Dodge, David. Dodge, David “Economic Integration in North America”, Bank of Canada Review, p45-50, 2003.
El-Agraa, Ali M, (1997), El-Agraa, Ali M Economic Integration Worldwide, St Martins Press, New York.
Gujarati, N., Damodar dan Porter, Gujarati, N., Damodar dan Porter, C., Dawn C., Dawn, (2009), Basic Econometrics, Fifth Edition, McGraw-Hill International Edition.
Husted, Steven dan Melvin, Michael Husted, Steven dan Melvin, Husted, Steven dan Melvin, Michael Michael, (2010),International Economics, Eight Edition, AddisonWesley.
Indonesian and Bali on the net Indonesian and Bali on the ne Indonesian and Bali on the net. Available at http://www.indo.com/distance, accessed on October 2010. 76 Buletin Ekonomi Moneter dan Perbankan, Oktober 2012
Krugman, Paul R. dan Krugman, Paul R. dan Maurice Obstfeld Maurice Obstfeld, (2009),International Economics: Theory and Policy, Eight Edition, Addison-Wesley.
Market Analysis dan Research, International Trade Center Market Analysis dan Research, International Trade Market Analysis dan Research, International Trade Center. “Trade Map”, Available at http://www.trademap.org/selectionmenu.aspx, Accessed on October 2010.
Pacheco, Amurgo., Alberto and Pierola, Denisse., Pacheco, Amurgo., Alberto and Pierola, Denisse., Martha. “Patterns of Export Diversifcation in Developing Countries: Intensive and Extensive Margins”. Policy Research Working Paper, 4473, The World Bank International Trade Department, 2008.
Pelkmans, Jacques, Pelkmans, Jacques, (2006),European Integration: Method and Economic Analysis, Third Edition,Pearson Education Limited.
Tamirisa, T., Natalia.”Exchange and Capital Controls as Barriers to Trade”. IMF working paper, Tamirisa, T., Natalia 1999.
Venables. J, Anthon Venables. J, Anthony. “International Trade; Regional Economic Integration”, The International Encyclopedia of Social and Behavioral Sciences, Article 34), London School of Economics, 2000.
Zarzoso, Martines., Inmaculada.” Zarzoso, Martines., Inmaculada Gravity Model: An Application to Trade Between Regional Blocs”, Atlantic Economic Journal, 2003
Buletin Ekonomi Moneter dan Perbankan / Bulletin of Monetary Economics and Banking is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.