The Impact of Imports of Consumer Goods and Raw Materials On The Growth Rate of The Manufacturing Sector In Indonesia
DOI:
10.51601/ijersc.v7i5.1097Published:
2026-10-12Downloads
Abstract
This study aims to analyze the effects of consumer goods imports, raw material imports, and inflation on the growth rate of the manufacturing sector in Indonesia during the period 2013–2024. The study uses quarterly secondary data obtained from Statistics Indonesia (Badan Pusat Statistik/BPS) and employs the Autoregressive Distributed Lag (ARDL) method. The Bounds Test indicates the existence of a cointegrating relationship among the variables. The long-run estimation results show that consumer goods imports have a negative and significant effect on the growth rate of the manufacturing sector, while raw material imports have a positive and significant effect. Meanwhile, inflation does not have a significant effect in the long run. In the short run, consumer goods imports have no significant effect in the current period but have a positive and significant effect with a one-quarter lag, while the effect at a two-quarter lag is not significant. The Error Correction Model (ECM) results indicate that approximately 45.54 percent of the deviation from the long-run equilibrium is corrected within one quarter. The findings indicate that the effects of imports on manufacturing performance vary by type of goods and time horizon. Raw material imports contribute to the growth of the manufacturing sector, whereas an increase in consumer goods imports in the long run is associated with pressure on domestic industrial growth. These findings highlight the importance of trade policies that consider the characteristics of import use, along with efforts to strengthen domestic industrial capacity.
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