Business Competitiveness and Threshold Price Transmission of Indonesian Coffee in Importing Countries
Journal Title: International Journal of Business and Management Invention - Year 2019, Vol 8, Issue 1
Abstract
Coffee is a leading commodity export in Indonesia and contributes greatly to the national coffee exports. Indonesia is the world's fourth largest exporter. The objectives of this study are investigating business competitiveness of Indonesian coffee compared to the other of coffee exporting countries and threshold price transmission in importing countries uses Constant Market Share Analysis (CMSA) and ECM models , and threshold cointegration . The results concluded that the most influencing business competitiveness was the effect of market distribution, threshold price transmission of Indonesian coffee in importing markets, the United States amounting to 0.9, Germany at -0.6, Japan at 0.5, Italy at 0.2, and Malaysia at -0.4. This means that when the coffee price of deviation in importing countries and Indonesia in its long-term balance exceeds its threshold value, coffee prices in importers countries will adjust to achieve their balance so that both coffee prices are in the Indonesian market and the markets of countries importers have a cointegration relationship.
Authors and Affiliations
Sulistyo Hadi, DediBudiman Hakim, Tanti Novianti
Keywords
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