How Did Globalization Boost the Nuts Production in Indonesia?

Agriculture plays a key role in Indonesia’s economy as it provides notable job opportunities for the people and contributes to the country’s foreign income. The Indonesian government initialized integration into the world economy through the implementation of development plans three decades ago. It has considerably influenced all economic sectors, including agriculture. Official data on nuts production shows that this activity has followed outstanding progress since the time that the plan came into force. Hence, the current study investigates the possible impacts of globalization on nuts production in Indonesia. To do so, we applied the non linear autoregressive distributed lag model (NARDL) to two variables of interest, namely the nuts production and the KOF globalization index for the period 1975 2019. The main findings prove the existence of a long run equilibrium relationship between the variables of interest. Moreover, the positive shocks to the globalization index have a direct impact on nuts production. In addition, we found evidence of the significant asymmetry between the globalization index and the nuts production in Indonesia, implying the significant difference between the effect of positive and negative shocks to globalization on nuts production.