Global Value Chain of Indonesia Furniture Industry

Tauhid Ahmad, Arief Daryanto, Rina Oktaviani, D.S. Priyarsono


The exports of the furniture industry plays an important role for the Indonesia’s economy. It is challenging, however, to measure the real benefits and added values of this industry due to the double counting problem. To address this issue, this study adopts a Global Value Chains (GVC) approach by using Input-Output (IO) tables developed by Organization for Economic Co-operation and Development as an alternative measurement of trades among countries. This study measures the value-added transactions of the Indonesian furniture industry from1995 to 2011, including its position in GVC. Three key findings are concluded. First, in the case of the Indonesian furniture industry, local players contribute the majority of added values compared to foreign counterparts. Secondly, Indonesia plays a key role in the upstreaming process of the global furniture industry, which supplies inputs for other countries. Third, The Indonesian furniture industry is increasingly connected with the global value chain of world furniture industry.


Global Value Chain, Indonesia furniture industry, Input-Output Table, GVC Participation

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