The Effect of Domestic Demand on Commodity Exports in Indonesia: A Simple Linear Regression Analysis

Abstract

Domestic demand for commodity exports in Indonesia in 2018-2022 has a complex and dynamic influence. Through a demand and supply theory approach, this study identifies a research gap that involves a lack of understanding of the influence of demand and supply elasticity, exchange rate mechanisms, the balance of payments, and competitiveness in various types of commodities. This study aims to analyze the effect of domestic demand on exports in Indonesia. Using panel data from different provinces and simple linear regression methods, this study tested hypotheses related to the influence of commodity types, fixed and random effects, and simple linear relationships and interactions between variables. It is predicted that the results of the research will make theoretical and practical additions to our understanding of the complicated relationship between exports and domestic demand, especially when it comes to the characteristics and categorization of exports. The implications of the research findings are expected to be the basis for government, business actors, and the public in formulating policies that can improve commodity trade performance in Indonesia, overcome challenges, and take advantage of existing opportunities. In addition, It is anticipated that this study will serve as a resource for other researchers who wish to investigate related or related subjects in the context of a
shifting global economy.