Trade Openness and Economic Growth in Indonesia
Keywords:Trade Openness, Economic Growth, GMM
Economic growth and international trade are related to one another. International trade stimulates long-term economic growth. The more trade activities in a country, the more rapid economic growth; this trade is a key component of development in a country, its contribution is felt with the increasing economic growth in several countries. The purpose of this study looks at the impact of trade openness on economic growth in Indonesia in 1986-2017. This research is a quantitative study using time series data from 1986-2017, research data obtained from the world bank, data analysis techniques using the GMM method to see the impact of trade openness on economic growth. The test results using the Generalized Method of Moments analysis method show that all variables significantly influence the dynamics of economic growth in Indonesia. This result is proven by the t-statistic probability value, which shows a smaller value compared to the t-table value. Then the value also has a probability of less than α. It can be concluded that the variables of trade, FDI, inflation, and the number of workers have a significant effect on economic growth in Indonesia.
Arsyad, L. (2010). Ekonomi Pembangunan. Edisi 5. UPP STIM YKPN, Yogyakarta.
Attaria, M. I. J., Javed. A.Y . (2013). Inflation, Economic Growth, and Government Expenditure of Pakistan: 1980-2010. International Conference On Applied Economics (ICOAE). Procedia Economics and Financ. 5. 58 – 67.
Azwar, S. (2001). Metode Penelitian. Pustaka Pelajar Offset : Yogyakarta
Blundell, R., & Bond, S. (1998). Initial Conditions and Moment Restrictions in Dynamic Panel Data Models. Journal of Econometrics, 87(1),115-143.
Bojanic, A. N., (2012). The impact of financial development and trade on the economic growth of Bolivia. J. Appl. Econ. 15 (1), 51–70.
Chang, R., L. Kaltani, dan N.V. Loayza. (2009). Openness Can Be Good for Growth: The Role of Policy Complementarities. Journal of Development Economics, 90: 33–49.Arsyad (2010).
Chen, P. dan R. Gupta. (2006). An Investigation of Openness and Economic Growth Using Panel Estimation. Working Paper: 2006-22 November 2006.
Dollar, D. dan A. Kraay. (2001). Trade, Growth, and Poverty. Development Research Group, The World Bank, June 2001.
Esen.O, Bayrak. M. (2016). Inflation and Economic Growth: A Dynamic Panel Threshold Analysis for Turkish Republics in Transition Process. Cell Aydın, Procedia - Social and Behavioral Sciences 229 ( 2016 ) 196 – 205.
Frankel, J.A. dan D. Romer. (1999). Does Trade Cause Growth?. American Economic Review, 89: 379-399. Sachs dan Warner, 1995.
Holtz-Eakin, D., Newey, W., Rosen, H.S., (1988). Estimating vector autoregressions with panel data. Econometrica 56 (6), 1371–1395.
Ioana. D. (2014). Employment - cause and effect of economic growth. 1st International Conference 'Economic Scientific Research - Theoretical, Empirical, and Practical Approaches', ESPERA 2013. Procedia Economics and Finance 8 ( 2014 ) 268 – 274.
Jeffrey D. Sachs, Andrew M. Warner. (1995). Economic Fluctuations and Growth, International Finance and Macroeconomics, Environment and Energy Economics. NBER Working Paper No. 5398 Issued in December 1995.
Kong, Q., Peng, D., Ni, Y., Jiang, X., & Wang, Z. (2020). Trade openness and Economic Growth Quality of China: Empirical Analysis Using Ardl Model. Finance Research Letters, 101488. https://doi.org/10.1016/j.frl.2020.101488.
Kyophilavong, Phouphet., Shahbaz, Muhammad., Anwar, Sabeen., Masood, Sameen. (2015). The energy-growth nexus in Thailand: Does trade openness boost up energy consumption?. Renewable and Sustainable Energy Reviews 46 (2015)265–274.
Mohseni.M, Jouzaryan.F. (2016). Examining the Effects of Inflation and Unemployment on Economic Growth in Iran (1996-2012) 1st International Conference on Applied Economics and Business, ICAEB 2015. Procedia Economics and Finance 36 ( 2016 ) 381 – 389.
Oliveira et al., (2005). Statistical analysis of cointegration vectors. J. Econ. Dyn. Control 12 (2–3), 231–254.
Pradhan, R. P., Arvin, M. B., Hall, J. H., & Norman, N. R. (2017). ASEAN economic growth, trade openness, and banking-sector depth: The nexus. Economia, 18(3), 359–379. https://doi.org/10.1016/j.econ.2017.05.002.
Riekhof, M. C., Regnier, E., & Quaas, M. F. (2019). Economic growth, international trade, and the depletion or conservation of renewable natural resources. Journal of Environmental Economics and Management, 97, 116–133. https://doi.org/10.1016/j.jeem.2018.04.008.
Salvatore, D. (1997). Ekonomi Internasional. Edisi Kelima. Terjemahan. Penerbit Erlangga, Jakarta.
Shahbaz, M., Nasreen, S., Ahmed, K., Hammoudeh, S. (2016). Trade Openness-Carbon Emissions Nexus: The Importance of Turning Points of Trade Openness for Country Panels. Energy Economics.
Vehapi, M. F., Sadiku, L., Petkovski, M. (2015). Empirical Analysis of the Effects of Trade Openness on Economic Growth: An Evidence for Southeast European Countries. Procedia Economics and Finance 19 ( 2015 ) 17 – 26.
World Bank. (2018). World Bank Report. Washington: World Bank
Badan Pusat Statistik Indonesia. Statistik Indonesia.