Abstract
Indonesia is one of the best quality cashew nut producers and exporters with a 1.2% share in the global market. This is very far from being compared to Vietnam as the world's main exporter of cashew nut controlling 34.07% of the global export market. This study aims to determine the competitive and comparative advantages of cashew nuts from Indonesia and Vietnam in the international market at 2009-2018. The various differences between the two countries make the products produced and distributed vary in quality and quantity. Competitive advantage is analyzed using Porter's diamond theory which consists of four factors to see the competitive advantage of an industry/country. Meanwhile, to determine the comparative advantage of cashew nut trading activities, the Revealed Comparative Advantage (RCA) and Trade Specialization Index (ISP) were calculated. Based on the results of the analysis, it can be seen that Indonesia has an advantage in producing cashew nuts, but has not been able to process it optimally, such as Vietnam which applies special technology and standards in producing cashew nuts. The RCA calculation shows that Vietnam's cashew nut exports have much greater competitiveness than Indonesia, and the ISP calculation results show that both exporters are still importing to maintain the economy and ensure the availability of industrial raw materials in the global market. Trade-related policies need to be considered in order to increase export profits and benefit domestic business actors
Highlights
Trade is an activity of buying and selling goods and services carried out with the aim of transferring goods/ services accompanied by a reward or compensation
The following is an explanation of the 4 main factors and 2 supporting factors of Porter's diamond theory regarding cashew nuts in Indonesia and Vietnam
Based on Berlian Porter's theory analysis and calculation of Revealed Comparative Advantage (RCA) and ISP, it can be concluded that the competitiveness of Indonesian cashews is still far from Vietnam in the last 10 years (2009-2018)
Summary
Trade is an activity of buying and selling goods and services carried out with the aim of transferring goods/ services accompanied by a reward or compensation. According to Law No 7 of 2014 concerning Trade, based on region, trade is divided into 3 categories, namely domestic trade within the scope of the Unitary State of the Republic of Indonesia, foreign trade which includes export and import activities of goods/ services that exceed national borders, and border trade which is a transaction carried out by Indonesian citizens who live on the border with residents of neighboring countries in fulfilling their needs (Supardi, 2019). The existence of trade regulations aimed at protection, considering that trade is the main driver of national economic development (Sahban, 2018). In the current era of globalization and free trade, bilateral, regional and international economic relations are considered important to fulfill needs. Various developments in the field of communication and logistics, as well as trade liberalization will facilitate transactions between countries
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