Comments by Woong Lee, on Globalization of the Automotive Industry: Is Indonesia Missing Out?

United States tend to have low total trade to GDP because of their large domestic markets. A better proxy would be the average applied most favored nation (MFN) tariff rate, which directly measures trade barriers. • FDI openness—the author uses the ratio of FDI inflow stock to GDP as the proxy for FDI openness. As the focus of the paper is the export of auto parts and components, a more appropriate proxy would be the ratio of FDI inflow stock for the manufacturing sector to GDP. In other words, FDI stocks in the agriculture and service sectors should be excluded. • Competitiveness—the author uses exchange rate as the proxy for a country’s export competitiveness. This is misleading as no country can maintain long-term competiveness by keeping its currency undervalued. The author should either find a more appropriate proxy for competitiveness—for example, the revealed comparative advantage index (RCA)—or simply refer to the variable as “real exchange rate”.