The Effect of Trade Liberalization on Indonesia's Exports

摘要

One of the open economic characteristics is the contribution of international trade in the economy. To make it bigger, there are many trade agreements are made to reduce international trade barriers. This study aims to determine the impact of trade liberalization on Indonesian exports to the three major trading partners in East Asia: South Korea, Japan, and China. The impact of liberalization on exports is examined using a gravity model and a panel with a period of 21 years (1996-2016). The independent variables used in this study are a tariff, degree of openness, population, exchange rate, GDP, and distance. The results of this study indicate that trade liberalization, viewed from the tariff and degree of openness has a significant effect on exports. Other influencing variables are GDP, population, and exchange rate. Distance variables have no effect on Indonesian exports to the three trading partner countries.