Green resolution and resilience of palm oil exports in Indonesia: Strengthening local value chains

Abstract

This study examines the scarcity of palm oil in Indonesia's CPO oil food commodity and the government's conservative steps through green resolution policies and strengthening local value chains. The validation of green economy resolution variable indicators in this study is green financing and local value chains in CPO exports as measured by product prices and production values. In addition to these variables, household consumption expenditure is the control variable used as a determining variable for CPO export levels. The research data uses data from the 2013Q1 to 2022Q4 time series. The research methodology describes the ARDL model for testing long-run effects and the ECM method for observing the economy's acceleration towards equilibrium during short-term shocks. The results showed that the long-term correlation between green financing resolution, product prices, and production value significantly affected the level of CPO exports at a significance level of 5% (p <0.05). However, the variable household consumption expenditure is not significant to the level of CPO exports in the long run at a significance of 5% (p <0.05). Then the short-term correlation shows that the green financing resolution variables, product prices, production values, and household consumption expenditures significantly affect the level of CPO exports at a significance of 5% (p <0.05).