18 Appreciation in the exchange rate of country A will shift the excess demand from
the ED to ED’ vecause ROW only be willing to pay a lower price. At the end of this condition will cause the domestic price in country A dropped, increasing the
price in ROW, lowering exports from country A, and reducing imports in ROW.
The impact of the appreciation of currency of the country A is the increase of foreign currency exchange rate in any amount and increase the price in the
ROW. This condition will cause the shifting from ES into ES’. Implicitly, the revaluation effect as implicit export taxes, because it lowers the amount of exports
at any price level. Figure 7 also shows that the appreciation in currency of country A cause prices to go down from Pw to Pa. In other words, the depreciation of the
currency in ROW will cause prices to rise from the initial equilibrium becomes Pr Tweeten, 1992.
Figure 7 Currency Revaluation Effect of The Exporting Country Source: Tweeten, 1992
4 METHODS
4.1 Types and Sources of Data
All data used in this study is secondary panel data, which is a combination of time series data and cross-sectional data. Time series data includes annual data
from 2003 to 2013, while the cross-sectional data covers ten major export destinations of the three main natural rubber exporting countries, with the largest
Country A Export Market of Country A
In the Currency of ROW In the Currency of Country A
19 export volumes going to the United States, Japan, China, Singapore, the Republic
of Korea, Germany, Canada, Brazil, India, and Belgium. The data used were obtained from Statistics Indonesia BPS, the International Rubber Study Group
IRSG, the United States Department of Agriculture USDA, the Centre dEtudes et dInformations Internationales prospectives CEPII, UN Comtrade,
the World Bank, and FAOSTAT. Types and sources of data for the study are summarized in Table 2.
Table 2 Type and Source of Data
No Type of Data
Unit Source of Data
1 Natural Rubber Export Volume
KG UN COMTRADE
2 Natural Rubber Production
KG FAOSTAT
3
Real GDP US
WDI
4
Distance Km
CEPII timeanddate.com
5 Exchange Rate
WDI
4.2 Analysis Method 4.2.1 Descriptive Analysis
The descriptive analysis is an analytical method that is used to describe the general condition of a phenomenon. The purpose of descriptive analysis is to
facilitate the interpretation or explanation in the estimation result of the data. In this study, a descriptive analysis is used to describe a general overview of the
international trade of natural rubber specifically the development of the sector from upstream to downstream in the world trade system.
Additionally, descriptive analysis is used to analyze the dynamics of international trade flows, as well as the competitiveness of the commodity as a
means of support for the result of the quantitative analysis. Some of the techniques are used to compile the data in the form of tables or graphs, along with
the interpretation of the data and presented arguments. Descriptive analysis and graphical tabulation are the simplest methods, yet still have a strong capability to
qualitatively explain the relationship between the observed variables.
4.2.2 Revealed Comparative Advantage RCA
RCA is a method of analysis for determining the competitiveness of a player, while taking into account the comparative advantage of an individual,
organization or country. The performance of natural rubber exports from exporting countries to importing countries is a variable that is measured by
calculating the share of natural rubber exports to total exports of all commodities to destination countries, compared with the share of world exports to the
destination countries. So that it can be quantitatively the ability or inability of three main exporting countries compete in international trade. The calculation of
the RCA method is as follows:
