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Volume 7 Issue 3 (September 2026)

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The Global Pepper Value Chain: A Geographic Scope Analysis of Indonesia's Pepper Exports under Comparative Advantage and Importer Non-Tariff Measures

DOI: https://doi.org/10.36956/rwae.v7i3.2973

Received: 9 December 2025 | Revised: 9 January 2026 | Accepted: 13 January 2026 | Published Online: 27 July 2026

Copyright © 2026 Andi Tenri Darhyati, Rita Nurmalina, Tanti Novianti, Suharno. Published by Nan Yang Academy of Sciences Pte. Ltd.

Creative Commons LicenseThis is an open access article under the Creative Commons Attribution-NonCommercial 4.0 International (CC BY-NC 4.0) License.

Abstract

Developing economies often participate in global value chains primarily through low-value-added upstream activities, while downstream processing rents accrue disproportionately to higher-income hubs. Indonesia is a case study of a developing country that is the largest producer of pepper, but still operates in the upstream segment. This study tests the hypothesis that export performance is increasingly governed by non-price market-access mechanisms, particularly non-tariff measures (NTMs) imposed by importers, rather than by export prices. Using a gravity model and panel data for 2014–2022 across fourteen major importing countries, we map the geographic reach of Indonesia's pepper exports and identify their key determinants. The empirical results demonstrate high explanatory power, with the model achieving an R-squared value of 0.85, indicating that the selected variables accurately capture the determinants of trade flows. The estimates show that exporter and importer economic size, economic distance, real exchange rates, revealed comparative advantage, and importer NTMs significantly shape export flows. In contrast, export prices are not robust predictors of export performance. This study contributes to the GVC and trade literature by providing empirical evidence that regulatory barriers and compliance-based competitiveness function as gatekeeping forces that condition market access and constrain upgrading opportunities for primary producers. The policy implication is the need to strengthen the capacity of the post-harvest industry, establish consistent quality standards, and implement upgrading strategies that can shift the export orientation from quantity to quality, making it competitive in the global value chain.

Keywords: Global Value Chain, Pepper Exports, Gravity Model, Non-Tariff Measures, Revealed Comparative Advantage

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