Trade Performance Analysis of Indonesia and Malaysia to the Organization of Islamic Cooperation

DOI

10.2991/icosihess-19.2019.24How to use a DOI?

Keywords

Trade performance; Panel data; RSCA index; OIC countries

Abstract

Along with its development, OIC was able to contribute to the economy, especially in the flow of international trade. Indonesia and Malaysia are the main actors in increasing exports in the OIC countries but Indonesia's exports in 2014-2015 in intra-OIC trade fell by 6.8%, while Malaysian exports in intra-OIC trade fell by 16.8%. This study aims to analyze the changing of specialization and competitiveness of Indonesian and Malaysian primary commodities to the OIC countries and to determine the influence of variables such as distance, GDP’s origin country, GDP’s destination country, exchange rates, openness, populations and control of corruption’s destination country of Indonesian and Malaysian export performance to the OIC. Using balanced panel data for 10 years, from 2008 to 2017. Analyzing the data using gravity model framework, results show that, there is significance in both countries. By using random effect estimation the regression results show that GDP and openness have a positive and significant in both countries, the exchange rate and distance have a negative and significant in both countries. In addition, with the RSCA (Revealed Symmetric Comparative Advantage) index. RSCAij index shows index of competitiveness, it value has intervals between -1 and 1 (-1≤ RSCAij ≤1). RSCAij more than zero means the country i has a comparative advantage in the product group j. Conversely, RSCAij less than zero means that the country i has no comparative advantage in the product group j. Results show that, there has been a changing pattern of primary commodities competitiveness within a span of 10 years in Indonesia and Malaysia.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Saykha Araz
AU  - Dyah Wardani
PY  - 2019/10
DA  - 2019/10
TI  - Trade Performance Analysis of Indonesia and Malaysia to the Organization of Islamic Cooperation
BT  - Proceedings of the Third International Conference on Sustainable Innovation 2019 – Humanity, Education and Social Sciences (IcoSIHESS 2019)
PB  - Atlantis Press
SP  - 144
EP  - 149
SN  - 2352-5398
UR  - https://doi.org/10.2991/icosihess-19.2019.24
DO  - 10.2991/icosihess-19.2019.24
ID  - Araz2019/10
ER  -