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Bulletin of Monetary Economics and Banking

Document Type

Article

Abstract

The forthcoming 2015, ASEAN is being confident to implement ASEAN Free Trade (AFTA). The existence of AFTA is to outstrip trade liberalization due to augment trade volume significantly and transaction easing as well among the members of AFTA, mainly by inducing lower tariffs some certain commodities up to 0%. This paper is conducted in order to examine on what prominent commodity of Indonesia compared to its counterparts namely Brunei, Malaysia, Philippines, Singapore and Thailand. These Indonesia counterparts are selected therefore they were the founding of ASEAN. Furthermore, this paper utilizes a modified Gravity Equation model. This model has an effort to estimate the significance of some parameters of variable from model equation. Thus, it can be detected that what are from these variables from a model equation being as a key determination factor to influence trading transactions. This paper also assesses the adjusted R-squared due to which Indonesia counterparts incur some vantage points as well as beneficial for Indonesia in terms of AFTA. The novelty contribution of this paper is to reveal the dynamics trade spillover between Indonesia some strategic sectors and its counterparts. By doing so, Indonesia is expected to be a dominant player in AFTA 2015 and taking some advantageous from AFTA into Indonesia account. Keywords: AFTA 2015, a modified gravity equation model, analysis of data panelJEL Classification: C33, C51, F15

First Page

55

Last Page

74

Creative Commons License

Creative Commons Attribution-NonCommercial 4.0 International License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

Indonesia

Affiliation

Institut Teknologi Bandung

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