Dyah Titis Kusuma Wardani


In addition to their membership in the Organization of Islamic Cooperation (OIC), Indonesia and Malaysia are also involved as active members in the evolving Association of South-East Asian Nation (ASEAN). This raises a question over whether involvement in the ASEAN, especially how ASEAN Free Trade Area (AFTA) brings about a negative or positive impact on Indonesia’s and Malaysia’s trade perfor­mance with fellow OIC member countries. The current paper attempts to examine empirically the likelihood of such relationship and explore whether there presents a systematic difference between the case of Indonesia and Malaysia. Based on the results, some implications will be highlighted and policy recommendations will be offered.



Regional integration; ASEAN; AFTA; Intra OIC trade

Full Text:



Abidin, ISZ. (2012). “Trade linkages between Malaysia and the OIC member countries: an empirical analysis on patterns, determinant factors, and prospects”. Unpublished doctoral thesis. Malaysia: Universitas Utara Malaysia.

Bergstrand, J. (1989) in Bergstrand, J. (1985), “The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence,” Review of Economics and Statistics, vol. 67 (August) pp. 474-481.

Bendjilali, B. (1997). “An intra-trade economet-ric model for OIC member countries: A cross

country analysis”. IRTI Research Papers, No.55. Jeddah: IRTI, IDB.

Carrère, C. (2003). Revisiting the effects of regional trading agreements on trade flows with proper specification of the gravity model. Etudes et Documents, No.10, CERDI, Université d’Auvergne.

Carrère, C. (2006). “Revisiting the Effects of Regional Trade Agreements on Trade Flows with Proper Specification of the Gravity Model.” European Economic Review, vol. 50, pp. 223– 247.

Cindoruk, S. (1992), “Economic Cooperation among OIC Countries and Islamic Common Market,” Journal of Economic Cooperation among Islamic Countries, vol. 13 (12) pp. 1-18.

COMCEC (2001). “Practical Steps and Possible Consequences of Establishing an Is Islamic Common Market,” Paper Presented at the Seventh Session of the COMCEC in Istanbul, Turkey, October 18-21.

Dell’Ariccia, G., 1999, “Exchange Rate Fluctuations and Trade Flows: Evidence from the European Union,” IMF Staff Papers 46(3), pp. 315-334.

Dianniar, U. (2013). “The Impact of Free Trade Agreements on Indonesia’s Agricultural Trade Flows: An Application of the Gravity Model Approach.” Unpublished Master Thesis. The Hague, the Netherlands.

Ghani GM. (2007). “Do OIC membership reduce trade?". Journal of Economic Cooperation and Development, vol. 28(4), pp. 39-62.

Gundogdu, AS. (2009). “Determinant of intra-

OIC Trade: Policy or exchange rate”. Jour¬nal of Economic Cooperation and Develop¬ment, vol. 30(3), pp. 1-42.

Jafari, Y, Ismail, MA, & Kouhestani, MS. (2011). “Determinants of trade flows among D8 countries: Evidence from the gravity model”. Journal of Economic Coop-eration and Devel¬opment, vol. 32(3), pp. 21.

Lee, YFL., Gohar, A. (2010). “Trade and intra-regional integration: Is Arab region a potential candidate for economic union”. Journal of Economic Cooperation and Devel-opment, vol. 31(3), pp. 67-82.

Matyas Làszlò (1997) “Proper Econometric Specification of the Gravity Model”. World Economy, vol. 20 (3), pp. 363-368.

Mehanna, RA., Sarieddine L., and Llorens, J. (2003). “Bilateral Trade and Islamic Sects”. International Business and Economics Research Journal, vol. 2(3), pp. 45-54.

Papazoglou, C., Pentecost, EJ., & Marques, H. (2006). “A Gravity Model Forecast of the Potential Trade Effects of EU Enlargement: Lessons from 2004 and Path-dependency in Integration. The World Economy, vol. 29 (8), pp. 1077–1089.

Saddam, A. and Kari, F. (2012). “Size of Econ-omy, Cost of Transport and Their Impact on Trade in GCC countries: Evidence from Qualitative and Quantitative approaches”. Journal of Finance and Investment Analysis, vol. 1(3), pp. 137-169.

Sousa, CMP., Martínez-López, FJ., & Coelho, F. (2012). “The Determinants of Export Performance: A Review of the Research in the Literature between 1998 and 2005. International Journal of Management Reviews, vol. 10 (4), pp. 343–374.

Sohn, CH. (2005). “Does the Gravity Model explain South Korea’s trade flows?” The Japanese Economic Review, vol. 56 (4), pp. 417-430.

Tinbergen, J. (1962). Shaping the world economy: Suggestions for an international economics policy. New York: The Twentieth Century Fund.



  • There are currently no refbacks.

Gedung Ki Bagus Hadikusuma (E4) Lantai 2, FE UMY
Jl. Lingkar Selatan, Kasihan, Bantul, Yogyakarta. 
JESP: Jurnal Ekonomi & Studi Pembangunan is licensed under a Creative Commons Attribution 4.0 International License.