Can Trade Integration Lead to Economic Development Convergence?

摘要

The main focus of this research is to analyse the integration of Indonesia's rubber trade with countries in the ASEAN region and how this trade integration affects the convergence of development. The analysis method used is the principal analysis method that measures the integration of Indonesia's rubber trade with the ASEAN region, and the fixed effect method approach to examine the impact of trade integration on regional economic development convergence. The results showed that the greater integration of Indonesia's rubber trade with ASEAN countries was marked by the principal value of its component analysis, which grew from 1989 to 2017. Increased integration of this rubber trade with the ASEAN region is also very dependent on regional and global economic conditions, when regional and global economies experience a decline, the intensity of Indonesia's rubber trade also fluctuates towards decreasing. Changes in economic progress shown by changes in the value of GDP greatly affect the strength of integration of Indonesia's rubber trade with the country concerned, changes in the value of GDP of rubber export destination countries have led to the convergence of Indonesia's economy with Singapore, Thailand and Vietnam, and experienced divergence with Malaysia and the Philippines.