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ANALYSIS OF FACTORS AFFECTING

INDONESIAN RUBBER EXPORT VOLUME TO

SELECTED COUNTRIES YEAR 2000-2013

Monday, October 17th 2016

Luppy Pangesti

120210120029

Outline

Introduction

Literature Review

Research Methods

Research Findings and Discussion

Conclusion and Suggestions

INTRODUCTION

Indonesia is the 2nd largest rubber exporter country after Thailand & Malaysia, with the

total production up to 3,2 Million tons in 2013

and keep increasing.

Thus, this results in a large export to many countries, where the

biggest importer countries are Japan, China, South Korea, USA, also Singapore.

The development of Indonesian rubber

export volume is can be determined by any factors, like price,

exchange rate/currency, etc.

P R O B L E M S

I D E N T I F I C A T I O N

1.How is the development of the

Indonesian Rubber Export Volume to

the selected countries in 2000-2013?

2.How do the factors (Indonesian

rubber total production, International

rubber price, Output manufacture, and

IDR exchange rate to US$) affect to the

Indonesian rubber export volume to the

selected countries in 2000-2013?

R E S E A R C H O B J E C T I V E S

1.To analyze the development of

Indonesian Rubber export volume to

Japan China, South Korea, Singapore,

and USA in 2000-2013.

2.To examine whether the factors

(Indonesia’s crumb rubber total

production, International Rubber Price,

Output Manufacture, and the exchange

rate) influence the Indonesian Rubber

exports to Japan, China, South Korea,

Singapore, and USA in the year 2000-

2013.

LITERATURE REVIEW

Theoretical Analysis

• Heckscher -Ohlin Theory

• Porter’s Theory of Competitive Advantage

• The Leontif Paradox Theory

International Trade

Theories

• Any products that can not be produced in the country now can be enjoyed by imports

• International trade allow specialization

• Countries that do international trade can produce greater than the domestic market.

Advantages of International

Trade

Empirical Analysis

Ratih Nuralitha Pratika, 2007

• The Analysis Effect of Exchange Rate Fluctuations on Agricultural Commodity Exports (Rubber and Coffee) in Indonesia

Juliana M, 2012

• Analysis of Affecting Factors of the Indonesian Rubber Export to United States

Flora Felina Aditasari , 2011

• Factors Affecting Indonesia's Rubber Exports to The People's Republic of China in 1999-2009

Conceptual Framework

Indonesian rubber export

volume to selected countries

Output Manufacture of

the selected countries

International rubber price

Indonesian rubber total production

IDR exchange rate to US$

Hypothesis

Output manufacture of the selected countries has positive influence on Indonesian rubber

export volume to Japan, China, South

Korea, Singapore, and United States.

International rubber price has negative

influence to the Indonesian rubber export volume to

Japan, China, South Korea, Singapore, and

United States.

Total production of Indonesian Rubber

has positive influence to Indonesian Rubber Export Volume to the Japan, China, South

Korea, Singapore, and United States.

Indonesian rupiah (IDR) exchange rate to the US dollar (US$) has negative influence on

Indonesian rubber export volume to

Japan, China, South Korea, Singapore, and

United States.

RESEARCH METHODS

Research Scope

Five countries ; Japan, China, South Korea, Singapore & USA for the period 2000-

2013

Indonesian Rubber Production, 2000-2013

Data

Secondary Data from World Bank, OECD, ADB, Bank Indonesia, Direktorat Jenderal Perkebunan

Indonesia & Badan Pusat Statistik (BPS) Indonesia

Methods (OLS with Panel Data Regression

Model)

Chow Test

Hausman Test

t-Test

F-Test

Coefficient of Determination

Normality Test

Heteroscedasticity Test

Autocorrelation Test

Multicollinearity Test

Model Estimation

Definition of Variables

1. Rubber Export Volume to Selected Countries (Dependent Variable)

2. Output Manufacture Development of Countries

3. International Rubber Price

4. Indonesian Rubber Total Production

5. Indonesian Rupiah (IDR) Exchange Rate to US Dollar (US$)

RESEARCH FINDINGS AND DISCUSSION

Estimation Results

Chow test

Hausman Test

Cross-section F Prob. F Results

Chow Test 67,290678 0,0000 Fixed Effect

Chi-Sq (2) Prob. Chi-Sq Results

Hausman Test 0,000 1,000 Random Effect

Random Effect Regression Model

The regression equation formed is as follows:

RE = 88,130 – 0,005 OM + 4,181 RP + 0,000096 TP – 0,0001 ER

Classical Assumption Test

• Normality test

• Multicollinearity Test

Jarque-Berra Test Prob. Jb Results

2,051562 0,358 Normal

Variance Inflation Factors

Variable Centered VIF

C NA

OM 1.001437

RP 4.870291

TP 5.442494

ER 2.009981

• Heteroscedasticity Test

• Autocorrelation Test (Durbin-Watson Test)

• F Test

DF1 (K) = 4

DF2 = N (60) – k (4) – n (1) = 55

Obs*R-Squared Prob. 2 Results

White Test 8,768715 0,067 Homoscedasticity

dU Durbin-Watson 4-dU Results

1,559 2,363482 2,441 No correlation detected

Fcalculated Ftabulated Prob.F α Decision Result

6,912 2,540 0,0001 0,05 Ho rejected Significant

Dependent Variable: RE

• T test

• Coefficient of Determination

Variable t-calculated t-table Ho Result

OM -2,101 -2,004 Rejected Significant at α=0,05

RP 0,184 2,004 Accepted Not significant at α=0,05

TP 2,180 2,004 Rejected Significant at α=0,05

ER -0,006 -2,004 Accepted Not significant at α=0,05

R² = 0.334 or

33,4%

1-R² = 66.6%

CONCLUSION AND POLICY IMPLICATION

Output manufacture has significant influence to the Indonesian rubber exports.

International rubber price does not have significant influence to the Indonesian rubber exports.

The Indonesian rubber total production has significant influence to the Indonesian rubber exports.

Indonesian Rupiah (IDR) to US dollar (US$) exchange rate has no significant effect to the Indonesian rubber exports.

Policy Implications

The companies or exporters of rubber in Indonesia can

maintain and improve the quality of its rubber production.

Indonesian government should find the solutions for the rubber development problem, such as

low productivity, lack of revitalizations and use of

Superior Seeds, etc.

Along with the presence of AEC (Asean Economic Community),

Indonesia should take this as an opportunity to spread the wings of the rubber export goes larger.

Photo Credit : Yopie Pangkey