Mixed‐Methods Insights on Trade Efficiency and Sustainability in Indonesia's Palm Oil Sector

ABSTRACT This study combines quantitative trade modelling with qualitative stakeholder perspectives. The quantitative analysis integrates gravity modelling and stochastic frontier analysis to evaluate trade efficiency across destination markets, revealing generally low export efficiency with considerable variation across markets and product groups. While tariffs exhibit a more consistent negative relationship with trade performance, the relationship between regulatory distance in non‐tariff measures and trade performance is less robust across model specifications. Qualitative insights from government, industry, smallholders, and non‐governmental organizations (NGOs) provide important context for these findings. Stakeholders consistently identify sustainability requirements, particularly certification, traceability, and land legality, as central to market access. Government actors emphasize trade diplomacy and market diversification, industry representatives highlight compliance costs and technical adaptation, smallholders stress price volatility and the risk of exclusion from formal supply chains, while the limited NGO responses identify sustainability as an important consideration for market legitimacy. Across stakeholder groups, sustainability emerges as a key link between trade barriers, market opportunities, and export competitiveness. Integrating both strands of evidence reveals convergence between the negative association of regulatory distance with trade performance and stakeholder concerns about sustainability‐related market barriers, particularly in the European Union (EU), while also highlighting firm‐level and implementation frictions that are not captured by macro‐level trade models. The findings suggest that access to the EU market is becoming increasingly dependent on compliance with stringent sustainability requirements. The study concludes that strengthening Indonesia's export performance requires a coordinated strategy combining efficiency improvements, sustainability compliance, trade diplomacy, and targeted support for smallholders.