Does Imported Input Affect Export Quality? Case of Indonesia in The Period of 2010-2015
Downloads
This study aims to find empirical evidence of whether importing input as an external source of knowledge and technology transfer for developing countries affects export quality. Empirical data shows that over 75 percent of Indonesia's total import values are intermediate products used in the manufacturing process. This study combines custom data with a dataset of Indonesia's Firm-Level data of the Large and Medium Manufacturing Industry from 2010 to 2015. It applies the fixed-effect regression method and finds that imported input has a less significant effect on the export quality. Given its numerous populations, this study indicates that increasing imported input aims to meet Indonesian domestic demand instead of export quality.
Amighini, A., & Sanfilippo, M. (2014). Impact of south–south FDI and trade on the export upgrading of African economies. World Development, 64, 1–17.
Anwar, S., & Sun, S. (2018). Foreign direct investment and export quality upgrading in China's manufacturing sector. International Review of Economics & Finance, 54, 289-298.
Badan Pusat Statistik. (2021). Nilai impor (nilai CIF) menurut golongan penggunaan barang (juta US$), 2018-2020 [Import value (CIF value) by category of goods used (US$ million), 2018-2020]. [Data set]. https://www.bps.go.id/indicator/8/1838/1/nilai-impor-nilai-cif-menurut-golongan-penggunaan-barang.html
Badan Pusat Statistik. (2022). Proporsi Nilai Tambah Sektor Industri Manufaktur Terhadap PDB, 2010-2015 [Proportion of Added Value of the Manufacturing Industry Sector to GDP, 2010-2015]. [Data set]. https://www.bps.go.id/indikator/indikator/view_data/0000/data/1214/sdgs_9/4
Bas, M., & Paunov, C. (2021). Input quality and skills are complementary and increase output quality: Causal evidence from Ecuador's trade liberalization. Journal of Development Economics, 151, 102668.
Bas, M., & Strauss-Kahn, V. (2015). Input-trade liberalization, export prices and quality upgrading. Journal of International Economics, 95(2), 250–262.
Hallak, J. (2006). Product quality and the direction of trade. Journal of International Economics, 68(1), 238-265.
Harding, T., & Javorcik, B. S. (2012). Foreign direct investment and export upgrading. Review of Economics and Statistics, 94(4), 964–980.
Hausmann, R., Hwang, J., & Rodrik, D. (2007). What you export matters. Journal of Economic Growth, 12(1), 1–25.
Hu, C., Parsley, D., & Tan, Y. (2021). Exchange rate induced export quality upgrading: A firm-level perspective. Economic Modelling, 98, 336-348.
Khandelwal, A. (2010). The long and short (of) quality ladders. Review of Economic Studies, 77(4).
Kugler, M., & Verhoogen, E. (2012). Prices, plant size, and product quality. The Review of Economic Studies, 79(1), 307–339.
Manova, K., & Yu, Z. (2017). Multi-product firms and product quality. Journal of International Economics, 109, 116-137.
Muendler, M.A. (2004, February 15). Trade, technology and productivity: a study of Brazilian manufacturers 1986-1998. SSRN Electronic Journal. https://econweb.ucsd.edu/muendler/papers/brazprod.pdf
Muhamad, G. M., Heshmati, A., & Khayyat, N. T. (2021). How to reduce the degree of dependency on natural resources? Resources Policy, 72, 102047. https://doi.org/10.1016/j.resourpol.2021.102047
Pusat Kebijakan Pendapatan Negara. (2013). Insentif Fiskal untuk Meningkatkan Daya Saing Industri Kendaraan Bermotor Roda Empat di Indonesia [Fiscal Incentives to Increase the Competitiveness of the Four-Wheeled Motor Vehicle Industry in Indonesia]. January 10, 2022. https://fiskal.kemenkeu.go.id/kajian/2013/07/17/120645822345633-insentif-fiskal-untuk-meningkatkan-daya-saing-industri-kendaraan-bermotor-roda-empat-di-indonesia
Rodrik, D. (2018, October). New technologies, global value chains, and developing economies. National Bureau of Economic Research, 25164. https://www.nber.org/papers/w25164
Schott, P. K. (2004). Across-product versus within-product specialization in international trade. The Quarterly Journal of Economics, 119(2), 647–678.
Tambunan, T. (2020). MSMEs in Times of Crisis: Evidence from Indonesia. JDE (Journal of Developing Economies), 5(2), 89-102. http://dx.doi.org/10.20473/jde.v5i2.20848
Torres Mazzi, C., & Foster-McGregor, N. (2021). Imported intermediates, technological capabilities and exports: Evidence from Brazilian firm-level data. Research Policy, 50(1), 104141.
Trade Map. (n.d). List of products imported by Indonesia. [Data set].https://www.trademap.org/Product_SelCountry_S.spx?nvpm=1%7c360%7c%7c%7c%7cTOTAL%7c%7c%7c4%7c1%7c1%7c1%7c2%7c1%7c1%7c1%7c1%7c1
United Nations Industrial Development Organization. (n.d). Classification of manufacturing sectors by technological intensity (ISIC Revision 4). https://stat.unido.org/content/learning-center/classification-of-manufacturing-sectors-by-technological-intensity-%28isic-revision-4%29;jsessionid=B99E902A3918AB9F3DF9859923DFC4F4
Verico, K., and Pangestu, M.E. (2021). The Economic Impact of Globalization in Indonesia, in S.Urata & H.T.T. Doan(eds.), Globalisation and Its Economic Consequences: Looking at APEC Economies (pp.76-102). Routledge – ERIA Studies in Development Economics.
Copyright (c) 2023 Tiura Herlinda, Kiki Verico
This work is licensed under a Creative Commons Attribution 4.0 International License.
JDE (Journal of Developing Economies) (p-ISSN: 2541-1012; e-ISSN: 2528-2018) is licensed under a Creative Commons Attribution 4.0 International License
- The journal allows the author to hold the copyright of the article without restrictions.
- The journal allows the author(s) to retain publishing rights without restrictions
- The legal formal aspect of journal publication accessibility refers to Creative Commons Attribution (CC BY)
