THE EFFECT OF IMPORT FACILITIES FOR EXPORT PURPOSES, EXCHANGE RATES, AND INFLATION ON EXPORTS OF TEXTILES AND TEXTILE PRODUCTS

  • Mohammad Fachrudin Politeknik Keuangan Negara STAN
  • Indah Puspitasari
Keywords: Export, KITE, exchange rate, inflation, textile and textile products

Abstract

The Import Facility for Export Purpose (KITE) is the Government's effort to encourage export performance. Companies that receive the KITE facility obtain fiscal incentives and export their product to import raw materials. The textile and textile product (TPT) industry is a strategic industry and has been determined by the Government as a pilot industry in the Roadmap for Making Indonesia 4.0. The textile industry relies on imported raw materials, so that the KITE facility is needed to encourage growth and increase product competitiveness in the international market. This study aims to determine the effect of the KITE facility, the rupiah exchange rate against the U.S. dollar, and the inflation rate on Indonesia's textile exports. We used a sample of 37 industrial textile companies in Indonesia that received the KITE facility  2016 to 2018. This study uses a panel data regression model with independent variables: KITE facility, exchange rates, inflation, and exported dependent variable. The results showed that the KITE facility had a positive and significant effect on the textile industry exports. In contrast, the exchange rate and inflation had a negative and significant impact on Indonesia's textile industry exports. This study's implications for the Government can be used to formulate a national strategy to increase export.

Published
2020-12-23