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Proceeding 1st International Conference of Economic Studies (ICOES) 2018

The Effect of the Export Value of North Sumatera in Japan and


United States to the Economic Growth of North Sumatera
Iskandar Muda 1) &Tengku Erry Nuradi 2)
1
Accounting Department – Faculty of Economics and Business,
Universitas Sumatera Utara, Medan, Indonesia
Telephone +62(61) 8214545. Postal Code 20155
iskandar1@usu.ac.id
www.usu.ac.id
2
Regional Planning, Universitas Sumatera Utara, Medan, Indonesia
Phone +62618214545. Postal Code 20155
tengkuerry@usu.ac.id
www.usu.ac.id

Keywords : Export Value, Clothing, Japan, United States, Economic Growth.


Abstract : The purpose of this research is aim to know the Effect of The Export Value of The North Sumatera in Japan
and United States to The Economic Growth of North Sumatera. The method of research using a causal
research design. The data used are secondary data sourced from Statistics Agency of North Sumatera
Province. The method of analysis used in this research is SEM method using Smart PLS software. The
results show that The Export Value of The North Sumatera to the United States influence to the Economic
Growth of North Sumatera.

1. INTRODUCTION produces palm oil with many derivative


The existence of export activities it is products then opens export opportunities to
clear will make the relationship between various countries. Each country has different
countries become better. With so many natural resources and human resource
meetings between countries it will further capabilities. Indonesia's export performance
strengthen the relationships of each country in 2013 is not expected to recover fully after
that work together. Exports will increase the the trade balance deficit several times
country's foreign exchange, creating jobs throughout 2012. Moreover, the recovery of
both of which are very helpful to the the European Union and the United States
Indonesian economy that will improve the crisis shows a slow trend of improvement
welfare of the people. If cooperation is done plus the continued decline in commodity
almost on all areas, then the better the prices in the international market. Limited
economy. Export activities will surely supply in a country, import activities were
expand production, which was only in the initiated. Import export activities can also
production into the country with the exports grow harmonious relations among nations.
it will be marketed abroad resulting in With this international trade, many parties
widespread production. When exporting a are involved and both benefit, both the profit
product, the exported product will directly of the sale and the benefits of the fulfillment
compete and if the product has distinctive of needs. Imported exports are also one of
characteristics with other countries then the the major jobs for businessmen. The natural
product will become known. It would be state of North Sumatra can not produce
easy to introduce domestic products abroad wheat and America cannot produce palm oil.
if our products do not exist in the country, Trade between nations is able to overcome
then our products will be the only product in this problem (Tampubolon et al., 2017;
the country (Nugroho, 2017; Nurhayati, Sihombing et al., 2017; Tarmizi et al., 2017;
2017; Safuan, 2017; Khaliqi et al., 2018; Sirouzilam et al., 2017; Muda and Nurlina,
Muda and Hutapea, 2018; Muda and 2018a & 2018b; Kesuma et al., 2018a &
Naibaho, 2018; Muda et al., 2018b; Yi, 2018 2018b; Muda et al., 2018a; 2018i and Sabri
& Sabri et al., 2018). Each country has et al., 2018). Interstate trade allows
different natural conditions, thus causing the Indonesia to obtain wheat and America to
product of each country is also different. obtain palm oil. Trade interstate will be able
North Sumatra with natural potential that to bring goods that can not be produced in

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Proceeding 1st International Conference of Economic Studies (ICOES) 2018

the country. For example Indonesia has not Japan, US companies are among the second
been able to produce heavy machinery. largest investment in Southeast Asia (Rifin,
Therefore, Indonesia trade with USA and 2017; Buyung et al., 2017; Permatasari and
Japan in the procurement of these tools. Silitonga, 2017; Oktavilia et al., 2017 &
Economically, Southeast Asia is a high- Astini and Tafiprios, 2017). Much of the
volume trading part of Japan, Korea, Taiwan wealth of the United States relies on
and Australia, including oil imports. multinational companies that also have
Southeast Asia is very large population significant interests in Southeast Asia.
automatically a vast market not only for Economic cooperation with the United
products but also for the US service States continues to increase. Although in its
industry. Southeast Asia is an export partner development foreign investment in this
and a partner of US imports. In addition, region is generally somewhat behind
Southeast Asia is also a destination for compared to East Asia (Adam et al., 2017 &
investment. Southeast Asia is an important Simanjuntak et al., 2017). But in some
US export destination after China and Japan sectors, both economically, politically and
in the Pacific region. But US exports to strategically, Southeast Asia remains
Southeast Asia declined by about 20% as the important. Southeast Asia is a potential
region was experiencing a financial crisis, market for products and services industries,
but trade was again taken into account as and as a key area of important natural
Southeast Asia began to recover from the resources, including oil and natural gas. One
crisis. Export-import activities of the United of the other important investment sectors in
States with ASEAN countries did experience Southeast Asia is the natural resources.
a decrease in volume between 1997-1999 ASEAN countries are collectively an area of
due to the crisis experienced by this region. great energy and natural resources of the
But slowly shows an increase between 2000- world, such as tin, copper, gold, and
2001. However, the events of September 11, renewable resources such as palm oil,
2001 again disrupted the stability of the rubber, coffee, and timber. The trade graph
world's economic wheels, so that trade of USA and Japan with North Sumatra
cooperation again declined in 2002. After Province is in Figure 1 below:

The Export Value of The North Sumatera to The Japan and United States

600,000
556,473 543,002
515,421 520,399
500,000 498,320
471,668 473,159 483,562
441,976 449,535446,450460,308
400,000 395,822 382,941
372,942

300,000 311,155
279,559288,321 278,648
255,233
245,456 235,951251,049 235,423
200,000 215,690200,114223,549205,053201,606230,760

100,000
79,008
44,562
-
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Japan United States America


Figure 1. The Export Value of The North Sumatera in Japan and United States

Based on Figure shows North Sumatra in 2014-2015 the value of exports to the
Province Exports higher value and volume United States continues to increase and
of transactions in the period 2000-2013 decreased exports to Japan.
higher to Japan than the United States. But
2. Material and Methods

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Proceeding 1st International Conference of Economic Studies (ICOES) 2018

The type of research used in this study is a formative indicators, whereas SEM as reflective
comperative causal research which is a research with relationships only. Inner model evaluation through
the characteristics of the problem of causality the bootsraping menu also generates t statistics values
between two variables or more. Comparative causal that will be used to test the hypothesis. The criteria
studies usually involve two or more groups and one are t statistic > 1.66 (Marhayanie et al., 2017; Muda
independent variable (Lubis et al., 2017; Muda et al., et al., 2018c; 2018e; 2018f; 2018g & 2018h). If the
2017; Syahyunan et al., 2017; Handoko et al., 2017; value of tcount < ttable then Ho accepted and when the
Ferine et al., 2017; Erlina et al., 2017a, 2017b, value of tcount > t table then Ho is rejected which means
Marhayanie et al., 2017; Situmorang et al., 2017; that the variable in question there is influence which
Nasir et al., 2017; Muda and Windari, 2018; Muda is significant (Nurlina et al., 2017; Muda, 2018a;
and Hasibuan, 2018 & Pohan et al., 2018). 2018b & 2018c). The significance test aims to find
Comparative-causal studies are suatau research out how big influence of independent variable to
conducted to illustrate the relationship scheme and dependent variable. The significance test on the PLS
the deeper influence of two or more facts and method, the independent variable in question is the
properties of the object under investigation. This exogenous latent variable and the dependent variable
study aims to determine the cause or reason for is the endogenous latent variable. Estimation value
differences in the behavior or status of individual for path relation in inner model is used to know the
groups (Dalimunthe et al., 2017; Hutagalung et al., significance of the relationships between latent
2017; Achmad et al, 2017; Badaruddin et al., 2017 & variables. This means that the independent variables
Muda et al., 2018d). This causal-comparative study is tested have an effect significantly to the dependent
a follow-up of correlational studies. If a correlational variable. The result of T-statistics value in the table
study describes the degree of relationship between path coefficients is presented in the following figure:
two or more facts and properties of the object under
study, then a causal-comparative study describes such
a causal relationship. Type of data is Secondary Data
from North Sumatera In Figures by Central Bureau of
Statistics 1999-2015. This study was tested with
SmartPLS. SmartPLS uses a bootstraping or
randomly multiplied method. Therefore assumption
of normality will not be a problem for PLS. Besides
being related to data normality, by doing
bootstrapping the PLS does not require a minimum Figure 2. Overall Model with Coefecient
number of samples. Research with small samples can
still use PLS
3. Result and Discussion The effect test can be seen in the following Table:
3.1. Result Table 1. The result of Bootsraping
3.1.1. Evaluation of Structural Model Standa
rd T P
In the implementation used two evaluation
Deviati Statistics Values
of assessment model that is Assessing Outer Model or on
Measurement Model by using test of convergent Japan -> Economic
validity, discriminant validity, composite reliability, 0,248 1,266 0,206
Growth
and Average Variance Extracted. And Assess the United States ->
Structural Model or Inner Model by using R-squared 0,299 2,721 0,007
Economic Growth
(R2) test and the path coefficient estimation test. PLS
Based on the above Table produces coefficient of
can be used to determine the complexity of the
0.005, smaller than α = 5% then the decision of
relationships of other constants and constants, as well
hypothesis testing reject H0 and accept the hypothesis
as the relationship of a const and its indicators. PLS is
Ha (Erlina et al., 2017b). In the variant-based PLS-
defined by two equations, ie inner mode and outer
Path Modeling, this model consists of an Outer model
model. Inner model determines the specification of
(measurement model) and an structural model. Thus
the relationship between the constants and other
the model evaluation on the Smart-PLS also consists
constants, whereas the outer model determines the
of two stages of outer model evaluation and Inner
specification of the relationship between the constants
Model. The important thing to consider in using
and the indicators. PLS can work on the model of its
Smart-PLS is the absence of a statistical criterion
constituent relationship and its reflective and

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Proceeding 1st International Conference of Economic Studies (ICOES) 2018

capable of assessing the overall model so that export process, service provision, and various
researchers are unable to perform inference analysis economic activities related to the international world
to test the feasibility of the model. Alternatively, and friendly countries will be more smoothly, and can
nonparametric tests through re-sampling methods provide important economic benefits.
such as Jackknifing and Bootstrapping can be used to 4. Conclusions
estimate a model produced. The results show that The The results show that The Export Value of The
Export Value of The North Sumatera to the United North Sumatera in United States to The North
States influence to the Economic Growth and while Sumatera influence to the Economic Growth. This
the exporting variables to Japan have not influence. study was conducted in 2 countries originating from
In addition to hypothesis testing through the Japan and USA. Future research should be observed
bootsrapping menu that produces T-statistics, inner from other continents.
model evaluation is also done by reviewing the R- References
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