Analysis of trade potential and factors influencing chili export in Indonesia

Abstract

The aim of this study is to analyze the factors that affect the export of chili in Indonesia, determine the most dominant factor, and also the export potential of chili in the importing country. The analytical methods used are panel data analysis with gravity model and trading potential analysis. The results show that the independent variables that significantly affect Indonesia's chili exports are Indonesia's real GDP/capita, the real GDP/capita of the destination country, the rupiah exchange rate against the destination country, and the geographical distance between Indonesia and the destination country. The most dominant factor is the rupiah exchange rate. Indonesia's trade is still under trade (pp > 1), so it can potentially expand the chili trade to importing countries.