Export Market Structure and Long-Run Economic Growth: Evidence from Sumatra’s Provincial Exports
DOI:
https://doi.org/10.46851/244Abstract
This study analyzes the impact of export growth from the Sumatra region on Indonesia’s Gross Domestic Product (GDP), focusing on Aceh, North Sumatra, West Sumatra, and South Sumatra. Using annual data from 1994 to 2022, the study examines export market structure and its dynamic relationship with economic growth through the Herfindahl–Hirschman Index (HHI), the four-firm concentration ratio (CR4), and the Autoregressive Distributed Lag (ARDL) model. The results indicate that the export market structure of these provinces is largely competitive, characterized by low concentration levels. Among the four provinces, only Aceh’s exports exhibit a positive and statistically significant long-run effect on national GDP, although the magnitude of this effect is smaller relative to exports from other provinces outside the study area. Overall, the findings confirm that continued export expansion contributes to Indonesia’s economic growth; however, the growth impact is highly dependent on export structure and diversification. The study underscores the importance of strengthening downstream processing and promoting product diversification in resource-based provinces to enhance value creation and ensure inclusive and resilient long-term economic development.
Keywords: Autoregressive Distributive Lag (ARDL), Export, Long-term Economic, Sumatera, Trade
JEL: F14; F43; O47
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