Trade Liberalization and Comparative Advantage: Evidence from Indonesia and Asian Trade Partners

This study analyzes whether ongoing liberalization has resulted in more profound trade expansion for Indonesia versus regional partner countries. A gravity model is first employed to find agreements significant intra-regional exports or diverted trade. applies the generalized method of moment (GMM-sys) and Poisson pseudo-maximum likelihood (PPML) estimator. Four groups manufactured products are aggregated according technology intensity, two nature-based estimated dynamic panel model. Additionally, revealed comparative advantage (RCA) a balance index (TBI) 5120 used map goods based on specialization–advantage patterns. The indicates that supported naturally sourced but not high-tech primary goods. export took place specialization. Competition increased between four partners: China, India, Thailand, Vietnam. gained from trading materials while losing some low-cost manufacturing sectors. potential remains large, as patterns differ among partners.