Threshold of Real Exchange Rate and the Performance of Manufacturing Industry in Indonesia

Abstract

This paper analyzes the presence of the threshold of the real rupiah exchange rate which influences the profitability of manufacturing industry in Indonesia. By using a non-dynamics panel data over medium and large scale companies during 2001-2009, we found the threshold of 82.4 for the real rupiah exchange rate (REER). The REER index ranging from 82.24 to 101.13 with the change value between -5.01% and 20.09% (yoy) is secure for the profitability of Indonesian manufacturing industry. This paper also conform the significant affect of Total Factor Productivity on firm’s profitability. Keywords: Profitability, Manufacturing industry, exchange rate JEL classification: F1, D21, L6

Optimum government size and economic growth in case of Indian states: Evidence from panel threshold model

“…Next, we apply a threshold regression model proposed by Hansen (1999Hansen ( , 2000 to attain the goal of this paper. The panel thresholds model is widely used (see, for example, Narayan, and Sharma, 2011;Noor et al, 2014;Surjaningsih et al, 2014). It produces more satisfactory outcome as compared to "cross-sectional" and "time-series models" (Hajamini and Falahi, 2018).…”