The effect of ASEAN-korea free trade agreement (AKFTA) on Indonesia trade: a gravity model approach

Arjun Saka Agung, Zulkarnain Ishak, Imam Asngari, Abdul Bashir

Abstract


The aim of this research is to analyze the effect of ASEAN Korea Free Trade Agreement (AKFTA) on Indonesia Trade with gravity model approach using panel data. This research is using Hausman and Chow test to choose the best between the Fixed Effect model (FEM) and Random Effect Model (REM). The test result shows that REM is the best model choosen to analyze the effect from GDP per capita, Exchange rate, distance and AKFTA Policy to the import from 14 AKFTA country economies to Indonesia. The result from R2 shows that the variation of independent variables (GDP per capita, Exchange rate, distance and AKFTA Policies) affected the variation of dependent variable (Import) as 54 percent. Meanwhile, from the gravity theory, the trade among AKFTA economies to Indonesia has bring positive impact as the distance has positive sign and lead to form trade creation. The variable of dummy policy has negative and significantly affected the import.

Keywords


Trade; Gravity Model; AKFTA, ASEAN

Full Text:

PDF


DOI: https://doi.org/10.29259/jep.v17i1.8916

Refbacks

  • There are currently no refbacks.





Jurnal Ekonomi Pembangunan
Jalan Raya Palembang-Prabumulih Km. 32
Jurusan Ekonomi Pembangunan, Fakultas Ekonomi Universitas Sriwijaya
Indralaya, Sumatera Selatan, Indonesia
Email: jep.unsri@gmail.com, Tel/Fax : (0711)580231


p-ISSN: 1829-5843, e-ISSN 2685-0788


Creative Commons License

Jurnal Ekonomi Pembangunan by http://ejournal.unsri.ac.id/index.php/jep 

is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.  

Jurnal Ekonomi Pembangunan is Indexed by:

Logo Google Scholar Unsri  Moraref One Search