Indonesian maize imports: A gravity approach

Abstract

The implementation of the ASEAN Economic Community (AEC) will affect the trade flow of goods and services in the ASEAN region. The flow of food from surplus countries to the food-insecure countries will improve national food security. The purpose of this study is to investigate the factors that affect Indonesia's maize Import in ASEAN trade. The study analyzed the annual data from 1990 to 2016 and cross-section ASEAN member countries, as well as Indonesia's trading partners such as Malaysia, the Philippines, Thailand, Vietnam, Myanmar, and Singapore. The study applies the Gravity model approach to identify factors that influence maize import in Indonesia. The panel data regression applied to the fixed-effect method. The results show that Indonesian maize imports were influenced by growth in GDP per capita, economic distance, import tariffs, the exchange rate of the Rupiah against the Dollar, the implementation of AEC (ASEAN Economic Community), non-tariff barriers, and the population growth. All the independent variables together affected Indonesian maize imports from Southeast Asia. The empirical results of this study reveal the implications for the development of the production and competitiveness of Indonesian maize. The Indonesian government should strive to increase farm productivity and efficiency to increase maize production.