Analysis of Potential Export Diversification of Rubber Tire Derivative Products to 9 Nontraditional Countries

Indonesia economic resilience is in a vulnerable condition amid the high global economic challenges. For this reason, there is a need for a strategy to improve the economy sustainably, one of which is through increasing and stabilizing exports. However, so far the Indonesian export market has only been concentrated in the main destination countries (traditional countries) such as the United States, Japan and the European Union, which causes export performance to be unstable due to the economic shocks experienced by these destination countries. This happened in rubber tire products, from 2001-2016 exports increased but tended to be unstable. So that, to increase and stabilize rubber tire exports, we can do market expansion (diversification) to potentially nontraditional countries (besides the main export destination countries). The study aims to identify nontraditional countries that have the potential to diversify the export market of rubber tire derivative products using the Export Product Dynamic (EPD) analysis and analyze the variables that affect rubber tire exports to nontraditional countries in 20012016 using panel data regression. The results showed that potential nontraditional countries for the diversification of the car tire export market were Brazil, the Philippines, Canada, Mexico and Egypt, for bus and lorry tire were the Philippines and Mexico, while bicycle tires were the Philippines and Egypt. Variable real GDP per capita, export prices of rubber tires and economic distance affect the export volume of rubber tires. While the real exchange rate and the export volume of rubber tires apart from Indonesia have no effect. Keywords— export diversification, rubber tire derivative products, nontraditional market, EPD, panel data regression