STUDY OF COMPETITIVENESS AND DETERMINING FACTORS OF EXPORTS INDONESIAN APPAREL PRODUCTS IN THE ASEAN MARKET

• Main Author: Septiawan, Heppy
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/71268
• Institution: Institut Teknologi Bandung

The apparel industry is one of the priority industries developed in the Master Plan of National Industry Development (RIPIN) for 2015–2035 and Making Indonesia 4.0. In addition, this industry has a large role in the national economy, namely as a contributor to non-oil and gas foreign exchange, employment (labor-intensive industries and social safety nets), as well as meeting domestic needs. However, recent developments in the exports of Indonesian apparel products have been stagnant and have not kept pace with the increase in the consumption of apparel, especially in the ASEAN market. As a result, the purpose of this study is to investigate the extent to which the export performance of Indonesian apparel products in the ASEAN market is viewed in terms of competitiveness and determinants between 2010 and 2019. The data used in this study comes from the Information Data Center of the Ministry of Industry, the World Development Indicators (WDI), and the Economic and Social Commission for Asia and the Pacific (ESCAP). To study export competitiveness, this research uses Revealed Symmetric Comparative Advantage (RSCA) index analysis. Meanwhile, panel data regression analysis is used with the gravity model approach to examine the determinants of exports of Indonesian apparel products in the ASEAN market. The findings revealed that the export competitiveness of Indonesian apparel products in the ASEAN market decreased from 2010 to 2019, with the country falling below Vietnam since 2013. As for a total of 34 types of apparel products, the average number of Vietnamese apparel products that were competitive was 23 products, higher than Indonesia's 20 products. Furthermore, the results of the analysis of the determinants of exports of Indonesian apparel products in the ASEAN market show that Indonesia's GDP, the GDP of trading partners, economic distance, population growth of trading partners, and export prices of apparel are significant determinants of exports of Indonesian apparel products in the ASEAN market, with the exception of the real exchange rate. Specifically, Indonesia's GDP shows results that are contrary with the gravity model because Indonesian apparel production is more oriented towards meeting domestic needs, so the economic growth that occurs does not necessarily encourage increased exports.