Abstract: The main purpose of this paper is to identify the major factors on import of fruits in Indonesia and to find out technological distance between Indonesia and partner countries using "Gravity Model". We modify the model, introducing a new variable, the technological distance, in order to understand the relevance of the technological gap between Indonesia and partner countries in the determination of import of fruits. Technological distance is the difference technology indicator between Indonesia and partner countries. We use ARCO index to calculate the technology indicator. With panel data from eight partner countries for the period 1990 to 2011, we estimate the parameter of the model using fixed effect model.
We find that a large number on import of fruits in Indonesia is caused by the reduction of import tariff and the difference technology between Indonesia and partner countries. Other factors that affect the import of fruit in Indonesia is GDP of Indonesia, GDP of partner countries, population of Indonesia, and population of partner countries. These results suggest that we need export promotion strategy of fruits to increase export of fruits in Indonesia.
Keywords: Import of fruits, Gravity Model, technological distance, technology indicator.