Research On The Determinant Factors Of ASEAN Apparel Exportation

The apparel industrial sector has become progressively more important to world economy.The apparel industry forms the main part of employment,production,manufacturing and trade.The apparel industry offers a variety of opportunities such as jobs of both skilled and unskilled labor.However,apparel industry faces the problem of raising minimum labor wages in manufacturing.The rising costs are bearing down on apparel enterprises to move to another country which has cheaper labor wages.The apparel industry has become one of the most dynamic industries among the members of the Association of Southeast Asian Nations(ASEAN).Then,this research examined how the apparel industry competitiveness in developing countries,like South East Asia,related to the trade agreement.Thailand,Malaysia,Singapore,Philippines,Indonesia,and Vietnam were selected for this study because of their similar economic development levels,and the new important labor intensive market.Apart from this seven countries,the others are United States of America,Australia,Belgium,Canada,China,Germany,Indonesia,Japan,South Korea,Singapore,and United Kingdom as a partner.Furthermore,the purpose of the research to study general overall structure production and exportation of ASEAN apparel industry,to understand ASEAN policy and trade agreement,and to study the determinant factors which affected the industry and the relationships among these factors.In order to find out the determinant factors of ASEAN apparel exportation,econometrics is applied to investigate.The research on the determinant factors of ASEAN apparel exportation covers from 2001 to 2015 by implementing panel data.For dependent variable,this paper use apparel products for exportation from ASEAN which have 2 types of the apparel;HS61(articles of the apparel,accessories,knit or crochet)and HS62(articles of the apparel,accessories,not knit or crochet).In case of independent variable,these nine variables composes of ASEAN countries' nominal GDP,partner countries' nominal GDP,bilateral exchange rate,ASEAN countries' labor force rate,partner countries,labor force rate,ASEAN countries' labor wage,partner countries,labor wage,ASEAN countries'foreign direct investment,and partner countries' foreign direct investment.In this research analyzes determinant factors of ASEAN apparel industry by using panel data analysis,and multiple regressions analysis,as well as Panel Unit Root test,the Hausman test,and Cointegration test.The empirical results indicate that InGDPit,XRTjjt,lnLabFit,LabWit,LabWjt,lnFDIit.lnFDIjt and InLabFjt are significant determinant of ASEAN apparel exportation at one,five and ten percent level.The only InGDPjt is not significant.Furthermore,InGDPit,XRTjjt,LabWjt,lnFDIit,and InFDIjt have a positive relationship with ASEAN apparel exportation.Base on the empirical result,it suggests that to ASEAN competitive advantage in apparel exportation.The government should launch stimulus economic policy to attractive FDI to increase the wealth of country.In each country should take advantage of access to FTA,AEC and AFTA to gain more market share and have free movement in good,technology and labor.