Since long time, the main destination of Indonesian tobacco has been were The United States, Japan, Malaysia, Belgium and Luxemburg, Netherlands, Germany, France and Spain. But the main destination is to The United States and the volume of tobacco export to USA is more stable than to another countries. Indonesia has several kinds of tobacco export, they are: tobacco not stripped Virginia type flue crude, tobacco not stripped, tobacco wholly/ partly stripped Virginia type flue crude, and tobacco wholly/ partly stripped. All the fact above interest the researcher, in holding the research to recognize the flows of export tobacco Indonesia to The United States. Hence, the title of this thesis is: THE ANALYSIS OF FACTORS AFFECTING INDONESIA’S TOBACCO EXPORTS TO THE UNITED STATES: A PARTIAL ADJUSTMENT MODEL (1981- 2001)
This research attempt to investigate about the effect of international tobacco price on the export volume of Indonesia’s tobacco to the United States, the effect of real total GDP of the United States on the export volume of Indonesia’s to the United States, the effect of exchange rate on the export volume of Indonesia’s to the United States, the effect of previous tobacco export on the export volume of Indonesia’s to the United States. The data used in this study are secondary data consisting of the export volume of Indonesia’s tobacco, international tobacco price, real total GDP of the United States, exchange rate, and the export volume at previous year. To eliminate the mistake and to make the estimation process is easier, the researcher used computer program Eviews. The relevance economic theory that is used in this research is demand theory. The analytical method used in this research is PAM (Partial adjustment Model). Since the research using PAM so volume export at previous year will be used as independent variable. The regression that used in this research is log- linear.
The results of this research are: Price of tobacco has a significant and positive effect on the volume of tobacco export. The United States real total GDP has a significant and positive effect on the volume of tobacco export. Exchange rate has a significant and negative effect on the volume of tobacco export. Tobacco export at previous year has a significant and positive effect on the volume of tobacco export. From he short- run and long- run PAM regression model the researcher conclude that Indonesia’s tobacco is less important to the USA in the future because in the short- run Indonesia’s tobacco is elastic and becoming more inelastic in the future. Beside that, the decision of buying Indonesia’s tobacco is more induced by income decision. In the short- run the commodity is necessity, however in the long- run it becomes non- necessity. From both result the researcher can conclude that Indonesia cannot rely on their income from tobacco. So Indonesia should make product diversification or country diversification.