Analysis of the Relationship Between Net Exports and Gross Regional Domestic Product Using the Panel Vector Correction Model (PVECM) Approach
DOI:
https://doi.org/10.30812/varian.v8i3.4898Keywords:
Cointegration, Granger Causality, GRDP, Net Export, PVECMAbstract
In regional economic growth, various factors play a role, including net exports, a key indicator of international trade. The purpose of this study is to analyze the long-term relationship and causal link between net exports and Gross Regional Domestic Product (GRDP) in Indonesia. The method used in this study is the Panel Vector Error Correction Model (PVECM), applied to panel data from 34 provinces in Indonesia for the period 2010–2023. The results of the study indicate a cointegration relationship between net exports and GRDP, in which a 1-unit increase in net exports decreases GRDP by 5.445139 units. The Granger Causality test shows a significant bidirectional relationship between the variables, indicating that they influence each other. The R² value of 54.99% indicates that the model explains 54.99% of the variation in net exports. The implication of these findings suggests that policymakers need to consider the quality and composition of export and import activities, as well as regional trade structures, to ensure that international trade contributes positively to regional economic growth.
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Copyright (c) 2025 Salma Soleha, Nurul Fiskia Gamayanti, Hartayuni Sain, Fadjryani
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