561 | Analysis of Factors Affecting Indonesian Coffee Exports in 2001-2018 Using The Vector
Auto regression (VAR) Approach
The focus of this study is to describe
the dynamic relationship of coffee exports
that are influenced by coffee prices, coffee
production and the rupiah exchange rate
using analysis Vector Auto regression
(VAR), and describe the relationship
between shock and forecasting on coffee
production, coffee prices and exchange
rates affecting coffee exports in 2001-2018
International Trade International
Trade is a buying and selling
transaction between several parties
involving more than one country.
International trade itself can be carried out
by individuals or groups using foreign
currency as a means of payment. When a
country carries out export and import
activities in international trade, it generates
profits. According to (Salvatore, 2014)
research states there are 3 theories about
the advantages of international trade
1. Profit Theory Absolute by Adam Smith
There is an absolute advantage that
the state has in producing goods
efficiently so that it can exchange these
goods to countries that experience
absolute losses due to inefficiency in
producing goods, so that both countries
benefit. An example is to produce one
unit of American grain and clothing
requires 8 and 4 workers. In the UK every
unit of grain and clothing, need to
employ as many as 10 and 2. Then the
superior American absolute on wheat
and English have advantages in clothing
(Bagaskoro & Imansyah, 2019).
2. Theory of Advantage Comparative by
David Ricardo
Every country can gain comparative
advantage if it can make efficiency in the
product that has the smallest absolute
loss and import the product that has the
largest absolute loss. America would
specialize in wheat and import clothing
from Britain (Siddiqui, 2018).
3. Heckscher-Ohlin Theory
Heckscher-Ohlin Theory is that
there is exporting of scarce and
expensive factors of production and
importing of cheap and cheap factors of
production. For example, developed
countries export capital and technology
to developing countries and developed
countries import low-paid labor. The
assumptions of the Heckscher-Ohlin
theory include: Two countries, two
commodities, and two factors of
production, Both countries use the same
technology, The same commodity is
labor-intensive in two countries, The
returns to scale are constant, Full
specialization in production, Equal
tastes in both countries, Perfect
competition in both commodity and
factor markets, Perfect mobility of
factors of production internally within a
country but not internationally, No
transportation costs, tariffs, or other
barriers to the free flow of international
trade, All resources are fully utilized, and
Balanced trade.
Export
Export is the process of sending goods
abroad so as to increase national income
which has an impact on increasing
production and employment (Salvatore,
2014). Coffee exporters must register with
the state because coffee exports are