Trade Globalization and Its Impact on Welfare in Indonesia

Yulinda Nurul Aini, Yanti Astrelina Purba, Ruth Meilliana
| Abstract views: 1416 | views: 589

Abstract

Indonesia was experiencing trade globalization in the form of decreasing and uniforming tariffs and eliminating various non-tariff barriers. Trade globalization had a positive and negative impact on Indonesian's welfare. Therefore, this study aims to analyze the effect of Trades Globalization on Indonesians Welfare. The Trade globalization was measured by three variables, namely Trade Openness, Inflation, and Exchange Rate. While Indonesians Welfare was measured by three aspects, namely education aspect using School Enrollment, health aspect using Life Expectancy, and economic aspect using the GDP Per capita. The data used was time series data from 1971-2016. This study applied mix-methods, quantitatively using Structural Equation Modeling Partial Least Square (SEM-PLS) and qualitatively using desk study. The results indicated that Trade Openness and Exchange Rate were positive and significant indicators in measuring Trade globalization. In addition, School Enrollment and GDP Per capita were also positive and significant indicators in measuring Indonesians Welfare. In general, the test showed that Trade globalization had a negative and significant influence on Indonesians Welfare. This fact suggested the importance of controlling exchange rate stability in Indonesia because the exchange rate could affect people's ability to maintain lives through purchasing power. In addition, globalization measured through Trade Openness could be an accommodation to obtain new technology in various fields, such as in education to improve the quality of human resources, in the health sector to treat various diseases and reduce the risk of death, and in the economy, sector to increase Per capita income.

Keywords

Globalization; Trade Setor; SEM-PLS; Welfare Level

Full Text:

PDF

References

Agusalim, L. dan Pohan, F. S. (2017). Globalisasi ekonomi dan pengaruhnya terhadap kemiskinan dan ketimpangan pendapatan di Indonesia. Presented in National Conference and Call for Paper Improving Accounting, Management dan Economic Research in Developing Bussiness Sustainability and Economi Growth.

Aka, Bedia, F. (2006). Openness, Globalization and Economic Growth: Empirical Evidence from Cote DIvoire. International Journal of Applied Econometrics and Quantitative Studies, 3(2): 67-85.

Aliyah, H., & Indra. (2017). Dampak Globalisasi Perdagangan terhadap Tingkat Kesejahteraan Negara-negara Berpenduduk Islam. Bisnis dan Manajemen, 7 (1), 99-110

Amala, F., & Heriqbaldi, U. (2015, Agustus 02). Dampak Keterbukaan Perdagangan Internasional Sektor Jasa Terhadap Pertumbuhan Ekonomi : Pendekatan Panel Dinamis. Ekonomi dan Bisnis.

Arif, Asma dan Ahmad Hasnat. (2012). Impact of Trade Openness On Output Growth: Co Integration and Error Correction Model Approach. International Journal of Economics and Financial Issues, 2(4): 379-385.

Bashar, Omar dan Khan Habibullah. (2007). Liberalization and Growth: An Eeconometric Study of Bangladesh. Working Paper, U21 Global, Malaysia, February.

Borchert, I., & Yotov, Y. Y. (2017). Distance, Globalization, and International Trade. Economics Letter, 32-38.

Chin, W. W. (1998). The Partial Least Squares Approach to Structural Equation Modelling. Modelling Methods for Bussiness Research, 295(2), 295-336.

Diputra, B. T. (2017). Pengaruh Keterbukaan Ekonomi Terhadap Indeks Pembangunan Manusia di Indonesia di Tahun 2000-2015. Departemen Ilmu Ekonomi Fakultas Ekonomi dan Bisnis Universitas Hasanuddin Makasar.

Fakih, M. (2002). Runtuhnya Teori Pembangunan dan Globalisasi. Yogyakarta: Pustaka Pelajar.

Ghozali, I. H., & Fuad. (2005). Structural Equation Modelling : Teori, Konsep, dan Aplikasi. Semarang: Badan Penerbit Universitas Diponegoro.

Mahesh, M. (2016). The Effects of Trade Openness on Income Inequality - Evidence from BRIC Countries. Economics Bulletin, 36(3): 1751-1761.

Minarsih, Maria M. (2017). Kebijakan Ekonomi Indonesia dan Internasional Serta Tantangannya Di Era Globalisasi. Jurnal Manajemen Universitas Pandanaran.

Mutascu, M., dan Fleischer, A. (2011). Economic Growth and Globalization in Romania. World Applied Science Journal 12 (10): 1691-1697, 2011.

Nawatmi, S. (2011). Globalisasi dan Inflasi Globalization and Inflation. Dinamika Keuangan dan Perbankan, 3, 88-101.

Okungbowa, F.O.E., dan Eburajolo, O.C. (2014). Globalization and Poverty Rate in Nigeria: An empirical Analysis. International Journal of Humanities and Social Science, 4(11): 126-135.

Ogunyomi, O.O., Daisi, O.R., dan Oluwashikemi, R.A. (2013). Economic Globalization, Income Inequality and Economic Growth In Nigeria: A Static Data Analysis (1986-2010). ABC Journal of Advanced Research, 2(2): 55-68.

Ravallion, M. (2006), Looking Beyond Averages In the Trade and Poverty Debate. World Development, Elsevier, 34(8): 1374-1392. Available from: http://dx.doi.org /10.1016/j.worlddev.2005.10.015.

Rifqi, M. (2013). Dampak Globalisasi Perdagangan antara ASEAN-5 dan China.

Salim, K., & Sari, M. P. (2014, Desember). Pengaruh Globalisasi terhadap Dunia Pendidikan.

Salimi, F., Akhoondzadeh, T., dan Arsalanbod, M. R. (2014). The triangle of trade liberalization, economic growth and income inequality. Communications on Advanced Computational Science with Applications, 2014(1): 1-15. http p://doi.org /10.5899 /2014/cacsa-00026.

Suprijanto, A. (2011). Dampak globalisasi ekonomi terhadap perekonomian Indonesia. Jurnal Ilmiah CIVIS, I(2).

Wong, M.Y.H. (2016). Globalization, spending and income inequality in Asia Pasific. Journal of Comparative Asian Development, 15(1): 1-18. http p://dx.doi.org/10.1080 /15339114.2015.1115746.

Wijayanto, S. H. (2008). Structural Equation Modelling dengan LISREL 8.8. Yogyakarta: Graha Ilmu.

Zakaria, M., dan Fida, B.A. (2016). Trade Openness and income inequality in China and the SAARC Region, Asian Pasific Economic Literature, 30(2): 33-44. htt p://doi.org/10. 1111/apel.12152.

Copyright (c) 2018 Journal of Indonesian Social Sciences and Humanities
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Refbacks

  • There are currently no refbacks.