The impact of opening the export promotion agencies on Indonesia's non-oil and gas exports

Abstract

The opening of the Indonesian Trade Promotion Center is one of the policies implemented by the government to increase Indonesia's non-oil and gas exports. However, fluctuations in the value of non-oil exports make the role of the ITPC doubtful. This study aims to analyze the impact of Indonesia Trade Promotion Center as Export Promotion Agency (EPA) on the value of Indonesia's non-oil and gas exports globally, to developing countries, and developed countries from 2000 to 2018. The method used in this study is the Random Effect Model and gravity model. Estimation results show that EPA Indonesia (ITPC) has a positive and significant effect on the value of Indonesian non-oil exports in all models. Foreign direct investment (FDI) has a positive effect and significant for global and developing countries model. GDP per capita and Free Trade Agreements have a significant positive effect on non-oil exports in all models. The geographical distance variable has a negative impact for Indonesian non-oil exports in all models, except for the developed countries model.

Do National Export Promotion Programs in Indonesia support export competitiveness?

“…Other studies differentiated companies based on their status: potential exporters, active exporters, or both [ 37 , 50 ]. Scholars have also focused on designing different programs such as export promotion agencies [ 15 , 51 ], trade fairs [ 50 ] coaching programs [ 44 ], and export assistance, such as finance, marketing, mobility, and information. Some have dealt with companies’ awareness of EPPs and whether some companies benefit more than others [ 45 , 52 ].…”

“…In Indonesia, the research on EPPs has been limited to five aspects. First, existing research is generally limited to specific EPPs: trade mobility [ 15 ], training [ 62 ], or generalized assistance (i.e., national or local EPP) [ 37 ]. Second, previous studies have not analyzed the relationship between government assistance and internal factors, limiting the understanding of how EPPs influence organizations [ 2 , 63 ].…”

“…EPPs are offered through several initiatives that include provision of information related to exports [ 9 ], assistance through education and training in export marketing [ 8 ], export product development [ 11 ], export and import management, and export promotion and communication (see Appendix Table A ). Other support provided by the government includes financial assistance such as export credit and credit guarantees [ 12 , 13 ], trade fairs [ 14 ], trade missions [ 15 ], and business-matching activities to begin relations between domestic companies and overseas partners and consumers. There is evidence that EPPs can enhance and improve organizational resources and capabilities [ 4 , 16 ].…”

Effects of International Trade on Global Food Security and Energy Use

“…Volume 5, No 1., October 2022 on the volume Concerning Indonesian oil and gas exports (Aisyah & Renggani, 2021), and foreign investment has a favorable and substantial effect on Indonesian oil and gas exports (Ajija, Zakia, & Purwono, 2021). Furthermore, simultaneously oil and gas production, inflation, and currency exchange rates have a considerable and favorable Result on the amount Indonesian oil and gas exports (Wahyono, Nugroho, & Imron, 2019).…”

Electric Vehicle Policy: The Main Pillar of Indonesia's Future Energy Security

“…Meanwhile, oil production continued to decline between 2000 and 2018. The imbalance of oil production and consumption, where oil is the primary source of Indonesia's energy, can threaten the availability of energy in Indonesia (Ajija et al, 2021).…”