Financial sector development and Indonesia's export performance

SUBIYANTORO, Alis, Prof. Susumu Kuwahara

2010 | Tesis | S2 Ilmu ekonomi

The role of exports in Indonesia’s economy has increased during last three decades. However, the market share of exports has experienced a decreasing trend. Many factors influence export performance of a country. Some researchers contend lack of accessibility to financing source as one factor hampering export performance. This paper verifies the presence of a positive relationship between financial sector development and Indonesia’s export performance. In addition, greater accessibility to bank’ loans in the agriculture sector can produced the greatest effect on export performance compared with in the manufacturing and mining sectors. However, the effect of increasing accessibility to bank’s loans on exports in the manufacturing sector is only slightly lower than in the agriculture sector. Furthermore, increasing accessibility to long-term credit seemed to have generated a higher effect on export performance compared with short-term credit. Finally, financial sector development has induced higher export performance in small-and medium-sized businesses relative to the exports of large-sized businesses. These findings confirmed the urgency to improve financing availability to export-oriented business, by emphasizing on the agriculture sector, manufacturing sector, long-term credit, and small- and medium-sized business.

Kata Kunci : Financial sector development,Export performance