THE IMPACT OF COVID-19 ON THE EXPORT–ECONOMIC GROWTH RELATIONSHIP IN INDONESIA, 2019-2020

Yulius Pratomo

Abstract


This study examines the moderating effect of the Covid-19 pandemic on the relationship between exports and economic growth in Indonesia. Specifically, it analyzes whether variations in additional Covid-19 cases across provinces weaken the impact of changes in the share of real exports on provincial real Gross Regional Domestic Product (GRDP) growth. The analysis applies a dynamic panel data approach using the Generalized Method of Moments (GMM) to address potential endogeneity. The study uses quarterly provincial-level panel data for Indonesia (34 provinces) over the period 2019–2020, with a total of 136 observations. The findings reveal that the Covid-19 pandemic significantly weakens the positive effect of exports on economic growth, although the moderating effect is relatively small than both the direct effect of exports and the direct negative impact of the pandemic. These results suggest that pandemic containment policies should be designed in balance with economic recovery strategies and underscore the importance of considering non-economic shocks in supply-side macroeconomic analysis.

Keywords: COVID-19 Pandemic; Economic Growth; Exports; Panel Data Analysis


Full Text:

PDF

References


Asante-Poku, N. A., & Van Huellen, S. (2021). Commodity exporter’s vulnerabilities in times of COVID-19: the case of Ghana. Canadian Journal of Development Studies, 42((1-2)), 122–144. https://doi.org/10.1080/02255189.2020.1857225

Aysun, U. (2024). Identifying the external and internal drivers of exchange rate volatility in small open economies. Emerging Markets Review, 58(101085), 1–54. https://doi.org/10.1016/j.ememar.2023.101085

Bas, M., Fernandes, A., & Paunov, C. (2024). How resilient was trade to COVID-19? Economics Letters, 240(111080), 1–6. https://doi.org/10.1016/j.econlet.2023.111080

Benfratello, L.; Bottasso, A.; Piccardo, C. (2022). R&D and export performance: exploring heterogeneity along the export intensity distribution. Journal of Industrial and Business Economics, 49(2), 189–232. https://doi.org/10.1007/s40812-022-00209-1

Carvajal, Alexander; Camargo, O. (2021). An empirical test of the export-led model in the member countries of the andean community (Comunidad Andina de Naciones-CAN). Lecturas de Economía, 94, 267–282. https://doi.org/10.17533/udea.le.n94a343336

Egyir, John; Sakyi, Daniel; Baidoo, S. (2020). How does capital flows affect the impact of trade on economic growth in Africa? The Journal of International Trade & Economic Development, 29(3), 353–372. https://doi.org/10.1080/09638199.2019.1692365

Gnangnon, S. K. (2022). Development aid and export resilience in developing countries: A reference to aid for trade. Economies, 10(7), 1–31. https://doi.org/10.3390/economies10070161

Guilloux-Nefussi, S. (2020). Globalization, market structure and inflation dynamics. Journal of International Economics, 123(103292), 1–23. https://doi.org/10.1016/j.jinteco.2020.103292

Jangam, B. P., Venkatesh, H., & Tiwari, A. K. (2024). Global value chains and economic growth: A study of resilience during the COVID‐19 pandemic. Journal of International Development, 36(4), 2096–2128. https://doi.org/10.1002/jid.3895

Kulu, E. (2024). Relationship Between Export and Economic Growth: Evidence from West African Countries. The Indian Economic Journal, 72(2), 287–302. https://doi.org/10.1177/00194662231212756

Lee, Cheng; Fernando, A. (2021). Foreign direct investment, export and economic growth in Indonesia: ARDL-ECM analysis. Review of Integrative Business and Economics Research, 10(3), 68–82.

Lee, Cheng; Hasyim, Budi; Lin, J. (2023). The export-led growth hypothesis: some evidence from the 8-ASEAN. Journal of Applied Finance & Banking, 13(2), 1–12. https://doi.org/10.47260/jafb/1321

Leng, A., & Sun, Y. (2024). The impact mechanism and breakthrough path of COVID-19 on enterprise financial distress: Evidence from China. Economic Analysis and Policy, 82, 16–31. https://doi.org/10.1016/j.eap.2024.03.002

Lim, Shiok; Chia, Ricky; Ho, C. (2010). Long-run validity of export-led growth: an empirical reinvestigation from linear and nonlinear cointegration test. Economics Bulletin, 30(2), 1182–1190.

Liu, Y., Zheng, Y., Bo, H., Ding, K., & Chan, F. T. (2023). Enterprises cooperation and government supervision strategies under the impact of COVID-19. Computers and Industrial Engineering, 185(109694). https://doi.org/10.1016/j.cie.2023.109694

Lu, B., Bao, X., & Wang, C. (2025). Public health emergencies and international trade in the context of global value chains: Evidence from COVID‐19 in China. The World Economy, 48(1), 188–212. https://doi.org/10.1111/twec.13635

Nagurney, A. (2021). Optimization of supply chain networks with inclusion of labor: Applications to COVID-19 pandemic disruptions. International Journal of Production Economics, 235(108080), 1–12. https://doi.org/10.1016/j.ijpe.2021.108080

Olivia, Susan; Gibson, John; Nasrudin, R. (2020). Indonesia in the Time of Covid-19. Bulletin of Indonesian Economic Studies, 56(2), 143–174. https://doi.org/10.1080/00074918.2020.1798581

Pane, Deasy; Patunru, A. (2021). Does export experience improve firms’ productivity? Evidence from Indonesia. The Journal of Development Studies, 57(12), 2156–2176. https://doi.org/10.1080/00220388.2021.1965126

Pratomo, D., Syafitri, W., & Anindya, C. (2020). Expanding middle class in Indonesia. The Journal of Indonesia Sustainable Development Planning, 1(3), 307–312. https://doi.org/10.46456/jisdep.v1i3.103

Rahman, M. D. A., Muhamad Senan, M. K. A., Bani, N. Y. M., Faturay, F., & Saari, M. Y. (2022). Resilient Trade During The COVID-19 Pandemic: Why Does Export Diversification Matter? International Journal of Economics and Management, 16(S1), 45–57. https://doi.org/10.47836/ijeamsi.16.1.004

Sağlam, Yağmur; Egeli, H. (2018). A comparison of domestic demand and export-led growth strategies for European transition economies: Dynamic panel data analysis. Foreign Trade Review, 53(3), 156–173. https://doi.org/10.1177/0015732517734755

Suryahadi, Asep; Izzati, Ridho; Suryadarma, D. (2020). Estimating the impact of covid-19 on poverty in Indonesia. Bulletin of Indonesian Economic Studies, 56(2), 175–192. https://doi.org/10.1080/00074918.2020.1779390

Temiz Dinç, D., & Gökmen, A. (2019). Export-led economic growth and the case of Brazil: An empirical research. Journal of Transnational Management, 24(2), 122–141. https://doi.org/10.1080/15475778.2019.1609895

Tetteh, B., & Ntsiful, E. (2023). A comparative analysis of the performances of macroeconomic indicators during the Global Financial Crisis, COVID-19 Pandemic, and the Russia-Ukraine War: The Ghanaian case. Research in Globalization, 7(100174), 1–12. https://doi.org/10.1016/j.resglo.2023.100174

Velayutham, A., Pavadaisamy, V., & Nandru, P. (2022). Causal Relationship between Exports, Imports, and GDP during COVID-19 Pandemic: Evidence from an Emerging Economy. Kristu Jayanti Journal of Management Sciences, 1(1), 18–39. https://doi.org/10.59176/kjms.v1i1.2199

Verschuur, Jasper; Koks, Elco; Hall, J. (2021). Observed impacts of the COVID-19 pandemic on global trade. Nature Human Behaviour, 5(3), 305–307. https://doi.org/10.1038/s41562-021-01060-5

Wani, Suadat; Yasmin, Effat; Soudager, M. (2023). Role of Institutional Quality in Trade Openness and Economic Growth Nexus: Empirical Evidence from India. Statistika: Statistics & Economy Journal, 103(2), 180–197. https://doi.org/10.54694/stat.2023.2

Yılmaz, E. (2024). What Is the Level of Savings Needed for High-Technology Export Led Growth? Ekonomika, 103(1), 127–144. https://doi.org/10.15388/Ekon.2024.103.1.8.




DOI: https://doi.org/10.37905/jsep.v3i3.35008

Refbacks

  • There are currently no refbacks.


                        

Alamat Redaksi Jurnal Studi Ekonomi dan Pembangunan: Program Studi Ekonomi Pembangunan, Jurusan Ilmu Ekonomi, Fakultas Ekonomi, Universitas Negeri Gorontalo. Jalan Jendral Sudirman, Nomor 6, Kota Gorontalo, Provinsi Gorontalo 96128, Indonesia. Telp. 0811432884; 08114329905 (Telepon/SMS/WA), E-mail : [email protected]