Search Results (17)

This paper investigates the impact of repatriated export proceeds on exchange rate volatility in Indonesia. By applying a time-varying parameter vector autoregression (TVP-VAR) model with stochastic volatility, we assess whether the impact of repatriated export proceeds can dampen the effect of short-term capital flows. Our findings indicate that the influence of export proceeds on exchange rate volatility varies over time, with no evidence supporting its ability to dampen the impact of short-term capital flows in the short and intermediate terms. Furthermore, we identify a reversal pattern in the impacts of both repatriated export proceeds and short-term foreign capital flows after 3–5 days, suggesting a potential need to evaluate policies aimed at dampening short-term capital flow impacts on exchange rate volatility. Our results are robust across a range of sensitivity and robustness checks, confirming the reliability of our findings. Full article

Indonesia plays a dominant role in the global refined palm oil (RPO) supply chain. Given the increasing global emphasis on carbon neutrality and sustainable trade, understanding the carbon footprint of Indonesian RPO and its embodied carbon emissions (ECE) in global trade is essential for identifying mitigation opportunities and aligning with international sustainability standards. This study integrates life cycle assessment and trade data to quantify the carbon footprint of RPO products and analyze the spatiotemporal patterns of trade-related ECE. Results show that producing 1 ton of RPO emits 2196.84 kg CO₂e, with wastewater treatment (57.67%) and land use change (32.82%) as the main contributors. From 2010 to 2022, ECE induced by RPO exports rose from 35.79 Mt CO₂e to 54.94 Mt CO₂e (3.64% annual growth). Major ECE importers were India, China, and Pakistan, accounting for 20.36%, 14.29%, and 11.45% of Indonesia’s total trade-related ECE, respectively. Comprehensive sensitivity and uncertainty analyses conducted on key parameters confirmed the robustness of the above results. Based on these robust findings, integrated mitigation strategies targeting both production optimization and sustainable trade mechanisms are proposed to accelerate Indonesia’s RPO industry decarbonization. Full article

The Indonesian maritime territory harbors a rich diversity of marine resources, making up approximately 37% of global fish species diversity. Tuna, particularly in Maluku Province, stands out as a vital economic asset with growing production and export numbers. Current practices for processing and evaluating tuna meat, however, face significant limitations due to basic infrastructure and reliance on manual inspection methods, leading to potential contamination risks and treatment identification errors. This research addresses these challenges by implementing an advanced deep learning solution based on convolutional neural networks (CNNs) to automatically identify three distinct treatment categories for tuna loin: No-Treatment, CO-Treatment, and CS-Treatment. Trained on a comprehensive image dataset, the model demonstrated exceptional performance with 95% accuracy. While field testing confirmed the model’s strong performance in correctly identifying treatment categories, occasional classification errors highlighted areas for improvement in data preprocessing. This study provides a significant step forward in automated fish processing assessment technology, offering a promising solution to longstanding challenges in the marine processing industry. Full article

Standard time-series modeling requires the stability of model parameters over time. The instability of model parameters is often caused by structural breaks, leading to the formation of nonlinear models. A state-dependent model (SDM) is a more general and flexible scheme in nonlinear modeling. On the other hand, time-series data often exhibit multiple frequency components, such as trends, seasonality, cycles, and noise. These frequency components can be optimized in forecasting using Singular Spectrum Analysis (SSA). Furthermore, the two most widely used approaches in SSA are Linear Recurrent Formula (SSAR) and Vector (SSAV). SSAV has better accuracy and robustness than SSAR, especially in handling structural breaks. Therefore, this research proposes modeling the SSAV coefficient with an SDM approach to take structural breaks called SDM-SSAV. SDM recursively updates the SSAV coefficient to adapt over time and between states using an Extended Kalman Filter (EKF). Empirical results with Indonesian Export data and simulation studies show that the accuracy of SDM-SSAV outperforms SSAR, SSAV, SDM-SSAR, hybrid ARIMA-LSTM, and VARI. Full article

Despite having a strong production capacity for fresh coconut, Indonesia has a certain deficiency in coconut processing, particularly coconut oil products, which is reflected in the declining market demand rates. The skyrocketing price of palm kernel oil (PKO) had been observed to impact the shifting demand for coconut oil. The cross-price competition with PKO was estimated to uncover the potential market demand for Indonesian coconut oils, especially during the periods of price discrepancies between 2020 and 2022. Thus, our study aimed to analyze the Indonesian coconut oil and palm kernel oil (PKO) market relationship as the markets reacted during the period of price volatility. This study is essential for Indonesian market evaluation, as both commodities are considered to be perfect substitute goods and are similar substances that contain high levels of lauric acid called “lauric oils”. We deployed an ARDL analysis utilizing secondary data from 1964 to 2022, focusing on the cross-price elasticity between coconut oil and PKO prices with the addition of prominent concerned variables. In the long-term estimations, the observational results indicated that the coconut oil and PKO prices had distinctive impacts on Indonesian coconut oil exports of −1.85% and 1.88%, respectively. In the short-term estimations, we found inverse values: the coconut oil price had positive impacts in the short-term period of 1.29% (D1.) and 2.35% (LD.), while the PKO had a negative impact on Indonesian coconut oil exports of −2.17%. This indicated that a PKO price reduction would increase the demand for Indonesian coconut oil exports due to the PKO price volatility and uncertainty perceived by the buyers in the short term. Our study also observed that rival producers, such as the Philippines, had a negative impact (−1.80%), representing the intense competition between Indonesia and the Philippines. Therefore, the Indonesian government has to elevate its coconut oil competitiveness to acquire the potential to expand the market and compete with other major coconut-producing countries. Full article

Low productivity and quality of employment have always been a big problem in Indonesia, caused by the lack and mismatch of skills in the workforce. Labor productivity (LP) describes the company’s ability to produce something. This can be determined by added value or output. Several factors influence LP, such as education, age, and training. The concept of global value chains (GVCs) has become an integral part of economic activity, and trade within global production networks has grown more rapidly than conventional trade in final goods. GVCs have both positive and negative impacts on employment opportunities. The automotive industry is categorised as one of the ten primary priority industries in the Indonesian manufacturing sector. This research analyses the impact of LP on GVC integration in the Indonesian automotive industry. The data used in this research comes from the World Input–Output Database (WIOD) and the Central Statistics Agency (BPS) from 1995 to 2014. The variables used include the number of workers, added value, real wages, and GVC, which were calculated by the author using the Inter-Country Input–Output (ICIO) approach. Using ICIO analysis, the following matrix should be constructed to determine involvement in GVCs. This research shows that LP in the Indonesian automotive industry has a positive trend, and the GVC position in the Indonesian automotive industry has a positive trend line. The domestic value chain increased from 4% to 33%. This improves the ability to produce higher value-added and intermediate export goods. LP increases the domestic value chain in the Indonesian automotive industry, leading to global value chain integration. Thus, LP goes hand in hand with integrating GVCs. Full article

The palm oil industry has emerged as one of the leading producers and exporters, as supported by data from the Central Bureau of Statistics in 2021, which indicates that Indonesian palm oil exports reached an impressive value of USD 18.44 billion, or IDR 258 trillion, in 2020, marking 18.43 percent growth compared to the previous year. Furthermore, the domestic markets for palm oil and palm kernel oil remain substantial despite improvements in export quantities. Various industries, including cooking oil refineries, specialty fats, shortening, margarine, bath soaps, and oleochemicals, present potential markets for palm oil (CPO) and palm kernel oil (PKO). The palm oil industry encompasses four related subsectors, namely growers, millers, refiners, and oleochemicals, forming an integrated value chain from upstream to downstream. The current focus on environmental, economic, and social sustainability drives companies to adopt internal green activities and expand their efforts toward sustainable supply chain management (SSCM). Implementing SSCM practices is often seen as economically beneficial, as research has demonstrated their positive impact on corporate performance from a resource perspective. Many green management applications are utilized in the palm oil industry. This study examines and highlights existing sustainable management practices across the entire palm oil supply chain, focusing on producing high-quality palm oil. This study utilized a systematic review methodology. A total of 62 articles were analyzed, which involved an extensive review of the relevant literature to identify research trends, gaps, and issues. This study contributes to the body of knowledge by expanding the theory of organizational readiness to prepare globally competitive palm oil products. The research findings hold practical significance for practitioners and academics by providing a comprehensive road map for implementing green management applications at the organizational level in the palm oil industry’s upstream-to-downstream chain. Full article

Cinnamon is one of the plantation spice commodities that contributes to the Indonesian economy. Indonesia is the largest exporter country in the world regarding the total export volume of cinnamon, but regarding the total value of exports, Indonesia comes in second after Sri Lanka. This study aims to analyze the comparative competitiveness of Indonesian cinnamon among major competitors in the United States’ market and to analyze the factors that influence the competitiveness of Indonesian cinnamon exports in the United States. The data used in this study comprise secondary data from 2007 to 2021 obtained from various data sources. The revealed comparative advantage method was used in a comparative competitiveness analysis. Moreover, the factors that affect the competitiveness of Indonesian cinnamon exports in the United States were analyzed using the ordinary least squares method. The results of the analysis show that Indonesian cinnamon is competitive in the United States’ market, but Sri Lanka’s cinnamon exports have stronger competitiveness than Indonesia’s in the United States’ market. The results of the ordinary least squares method show that the exchange rate of the IDR (rupiah) against the USD, the volume of Indonesian cinnamon exports, the GDP per capita of the USA and the value of cinnamon exports to the USA have a significant effect on the competitiveness of Indonesian cinnamon exports to the United States. Full article

The Government of the Indonesian Republic has targeted an increase in the value of shrimp exports and production until 250% by 2024. Thus, a special strategy is needed to develop whiteleg shrimp (Litopenaeus vannamei) culture that can increase production but does not negatively impact the aquatic environment. For this reason, research was carried out to obtain a strategy for developing sustainable intensive/super-intensive technology of whiteleg shrimp culture in South Sulawesi Province, Indonesia. The activity was conducted in South Sulawesi Province from March to July 2021. The data were collected from questionnaires submitted to respondents or actors, namely whiteleg shrimp brackishwater pond managers and other stakeholders and structured observations on whiteleg shrimp ponds. The validity of the questionnaire was tested using Corrected Item-Total Correlation method and the reliability was tested using Cronbach’s alpha method. Another primary data source was obtained through Focus Group Discussion. Data analysis was undertaken using the Analytical Hierarchy Process method. The research results show that, of the 18 intensive/super-intensive technology of whiteleg shrimp farming businesses operating in Bulukumba, Je’neponto, and Takalar Regencies, only one whitleg shrimp farming business applies super-intensive technology. The main problems in intensive/super-intensive whiteleg shrimp culture are disease attacks, namely acute hepatopancreatic necrosis disease or early mortality syndrome and white feces disease and the inconsistent quality of seed. Among the four criteria studied, it was found that environmental factor criteria are the most influential in developing intensive/super-intensive technology of whiteleg shrimp culture. Among the seven alternative strategies, the order of priority of the alternative strategies is environmental protection of culture, management of culture areas, modern technological innovation, environmentally friendly culture technology, easy access to business and capital, improvement of human resources, and availability of pond facilities. Full article

Crude palm oil (CPO) is a valuable commodity for Indonesia’s economy as the country has become the world’s biggest producer and exporter. Therefore, maintaining productivity in the CPO industry is crucial to ensure that the global demand is met. This study aims to examine Indonesian CPO productivity and its components using total factor productivity growth (TFPg) with stochastic frontier analysis. This study analyzes the variation in the TFPg across years, locations, and firm sizes. The first two analyses imply that, on average, the CPO industry’s productivity declines annually, with firms in 20 provinces experiencing negative TFPg. Regarding size, the analysis demonstrates that the technical efficiency change (TEC) and technical change (TC) have regressed the TFPg in all scale firms. However, medium firms saw a smaller decline in comparison to large firms. Conversely, large firms possess slightly better scale efficiency change (SEC) than medium firms, although both types attain a negative SEC. The findings also show that the main factor contributing to the gain or decline in productivity is TC, which suggests the urgency of innovative technology in the CPO industry. Full article

Palm oils have been proven to have the highest yield among vegetable oils, which is one of the critical factors in ensuring global food security. However, the world palm oil market has not been entirely utilised due to intervention policies that disrupt the global trade flow. Hence, this study aims to identify the technical efficiency of palm oil exports and then analyse the export potential of two leading producers and exporters of palm oil, Malaysia and Indonesia. A stochastic frontier model (SFM) has been used to estimate the level of technical efficiency across two countries for a sample of 59 major palm oil importing countries during 2009–2019. Palm oil export potential is then calculated using the value of technical export efficiency obtained from the SFM. The main findings revealed the technical inefficiency of world palm oil exports. Comparing the two countries, the Indonesian average technical efficiency value is higher than Malaysian throughout the year. Moreover, the technical efficiency estimates reveal that Malaysia and Indonesia dominate different markets, except in the Netherlands. In terms of export potential, the study found that both major exporting countries of palm oil have great potential to tap more into the same countries, namely China, India, Thailand and the United States. The policy implications of this study suggest that policymakers from both countries should set up a new combined strategy to maximise the palm oil export to their trading partners. Low technical efficiency values in several importing countries show great potential to explore further. Hence, there is a vast potential market for palm oil export to be tapped in those countries. Full article

This paper examines the impact of special tariffs between China and the United States (US) on their indirect trade partners via spillover effects. We applied a Value-Added Real Effective Exchange Rate (VA-REER) index to simulate how an increase in tariffs induces changes in demand for goods from Indonesia and selected Asian partners. We used the Input–Output Database (WIOD) to simulate the spillover effects across partners via the Global Value Chain (GVC) using data from 2000 to 2014. The results suggest that demand is doubly more responsive to prices (tariffs) when value-added (VA-REER) index is used instead of the conventional REER index (gross trade). We found that US tariffs on Chinese goods have a negative spillover impact on Indonesia’s exports. Meanwhile, the Chinese tariffs on American goods lead to small increased demand for Indonesian exports. We also found that US and China become equally crucial for Indonesia under the Value-Added REER scheme, concluding that the conventional REER approach may have underestimated the impact of US tariffs on Chinese goods. Finally, we found that Indonesia would be at risk to trade shocks if the US applies tariffs on China, Asian partners (Japan and South Korea), and the European Union (EU). Full article

Within Asia, imported fruits and vegetables are often considered as a delicacy and of high value, and are increasingly demanded compared to local products. There are numerous significant factors involved with consumers’ characteristics and their corresponding values towards these products. This study investigates potential consumers and their preferences towards imported fruits and vegetables in three Asian countries: Taiwan, Japan, and Indonesia. A total of 1350 survey responses collected from Taiwan, Japan, and Indonesia are examined by a best–worst scaling method with a latent class multinomial logit model. Results show that consumers tend to choose imported fruits that are not commonly provided by domestic producers. While a food safety certified label and freshness are consistently identified as the most and second most important food values for Taiwanese, Japanese, and Indonesian consumers, price is still an important factor for certain consumer groups. The majority of Taiwanese and Japanese consumers (i.e., female, higher education, and from an urban area) prefer imported fruits and vegetables, while the majority of Indonesian consumers do not pay much attention to imported fruits and vegetables. While Taiwan, Japan, and Indonesia are island countries, the novelty of this study shows that consumer preferences do not behave the same. The implications of this study should be of interest to producers and exporters who wish to positively impact the design of their international marketing strategies. Full article

As the automotive industry shifts from internal combustion engine (ICE) vehicles to electric vehicles (EVs), many countries are setting new strategies in their transportation sector. The Li-ion battery is currently the most common battery used in EVs due to its high energy density, durability, safety, and cost competitiveness. Nickel is predicted to be an essential component for the lithium nickel cobalt manganese oxide (NMC) as a cathode material of choice for EV applications. Indonesia, one of the world’s largest nickel ore suppliers, put an export ban on nickel ore effective from 2020. The bold movement was intended to initiate the domestic EV industry and encourage investors abroad to drive their manufacturing activities into the country. On the other hand, the global Li-ion battery manufacturers who imported nickel from Indonesia had to restrategize their businesses. This review discussed the chronological events leading to the ban and after the ban from the media, government regulations, and literature reviews. The authors of this study also conducted interviews and attended seminars with the national experts and key players in the battery and EV industry to gain their most pertinent insights. The SWOT analysis of the reviewed materials indicated that while the Indonesian battery industry is still new, it needs to diversify its research and development activities and collaborate internationally to optimize the utilization of its resources and meet the purchasing power of the domestic EV market. Finally, this study summarized six key factors to support Indonesia’s ambition to be a new regional hub for EVs. These factors are: (1) pricing, (2) technology, (3) policy, (4) investment, (5) infrastructure, and (6) compliance with sustainability standards. Full article

Forecasting of LME (London Metal Exchange) nickel prices remains an interesting topic but lacks consensus. This study aims to fill knowledge gaps by demonstrating the announcement effect of export bans by the Indonesian government. This article focuses on Indonesia because Indonesia produces more than 60% of global nickel ore. We identified the sequence of two episodes in which Indonesian export bans of nickel ore appeared to increase LME nickel prices. The impact of the Indonesian export ban in 2014 is somewhat larger than that of 2019. The shock on the LME nickel market in 2014 was sustained for a while after the ban was implemented. We believe that this is the first export ban that has had unexpected effects within the market. Full article