The Effect of Export, Import, and Investment on the Manufacturing Industry Output in Indonesia

Abstract

One of the benefits of Indonesia establishing unions with ASEAN countries was reinforcing the competitiveness of national manufacturing industries since the ASEAN was still the primary destination for Indonesia's exports. The study aimed to analyze the effect of exports, imports, domestic investment, and foreign investment on the output of the manufacturing industry in Indonesia. The research sample was the economic condition in Indonesia in the last five years, during the 2016-2020 period. The analysis technique used was multiple linear regression. The results showed that only imports have a positive and significant effect on the output of the manufacturing industry. Domestic and foreign investment and exports did not significantly affect the manufacturing industry's outcome. The imports enforce the manufacturing industry output, but it has an insignificant contribution to the resilience of the national industry. Reducing imports prevented a trade balance deficit, especially in trade cooperation with China and Singapore.