APAKAH SUNK COST ENTRY BERPENGARUH PADA EKSPOR INDONESIA KE SINGAPURA?: PENDEKATAN AGGREGATE

Singapore has been known as an intermediary country for Indonesia's export and import trade. Sunk cost entry is one of the exporter considerations to enter an export market. However, if there is an intermediary trade, does sunk cost still become a consideration? The purpose of this study is to examine whether the sunk cost entry affects Indonesian export to Singapore or not. This study uses Baldwin-Krugman's Hysteresis model due to an aggregate data usage and a surge in the exchange rate. This study uses the coefficient changes method since structural break is happening and its value is estimated by the Autoregressive Distributed Lag (ARDL) regression model. The result shows that sunk cost does not affect Indonesian exports to Singapore, or in another word it does not become a consideration to enter Singapore markets. It is important that the exporters with limited capital use Singapore as an intermediary. The Government should propose beginner exporters to choose Singapore as the intermediary country trade.