CHANGES IN VERTICAL TRADE PATTERNS IN HIGH-TECHNOLOGY COMPANIES IN EAST JAVA

Wenny Restikasari (Fakultas Ekonomi dan Bisnis, Universitas Airlangga)
Dyah Wulan Sari (Fakultas Ekonomi dan Bisnis, Universitas Airlangga)
Angga Erlando (Fakultas Ekonomi dan Bisnis, Universitas Airlangga)
Fery Dwi Riyanto (Universitas Islam Negeri Maulana Malik Ibrahim Malang)

East Java Economic Journal
Vol. 3 No. 2 (2019)

This study aims to insvestigate the impact of vertical trade pattern as export intensity, vertical trade integration and two-way trade dummy to firm production capability. This study deals with firm level data of East Java high-tech manufacturing induesties, employs as generalized method of moments (GMM) approach to examine the most imprortant factor of a vertical trade phenomenom. In the full-sample, the result demonstrates that vertical trade integration and two-way trade are significant determinants on firm’s production while export intensity is not. In ordinary trader sub-sample, export intensity is a significant determinant of firm’s production, whereas in vertical trader sub-sample export intensity is not.