Questioning the competitiveness of Indonesian wooden furniture in the global market

Indonesia is one of the top-ten most dominant manufacturers of wooden furniture in the world, exporting approximately $ 1.34 billion of wooden furniture in 2015, with a market share 2.09%. However, in the last decade, the volume of wood furniture exports has gradually decreased. Additionally, the wo...

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Bibliographic Details
Published inIOP conference series. Earth and environmental science Vol. 285; no. 1; pp. 12015 - 12028
Main Authors Nurkomariyah, S, Firdaus, M, Nurrochmat, D R, Erbaugh, J T
Format Journal Article
LanguageEnglish
Published Bristol IOP Publishing 01.05.2019
Subjects
Competitiveness
Economic analysis
Exports
Furniture industry
Global marketing
Market positioning
Raw materials
Used goods
Wood
Indonesia
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Summary:Indonesia is one of the top-ten most dominant manufacturers of wooden furniture in the world, exporting approximately $ 1.34 billion of wooden furniture in 2015, with a market share 2.09%. However, in the last decade, the volume of wood furniture exports has gradually decreased. Additionally, the wooden furniture industry in Indonesia must now implement the timber legality verification system (SVLK) to ensure raw materials come from legal sources. Given the importance of the wooden furniture industry and recent timber legality mandates, this study: 1) analyzes the competitiveness of Indonesian wooden furniture in the international markets and 2) investigates the relationship between the timber legality assurance system (TLAS) and the competitiveness of Indonesian wooden furniture in the global market. This research uses economic trade data and revealed comparative advantage (RCA) to analyze the comparative advantage of wooden furniture from Indonesia in the global market, as well as export product dynamics (EPD) methods to determine the market position of Indonesian wooden furniture. The RCA index shows that Indonesia has a comparative advantage, but its competitiveness is lower than China, Vietnam, and Malaysia. The EPD methods indicate that the competitiveness of Indonesian wood furniture continues to decline. These analyses point to a potential weakness in SVLK in relation to the competitiveness of Indonesian wood furniture in key international markets.
ISSN:1755-1307
1755-1315
DOI:10.1088/1755-1315/285/1/012015