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    The effects of agglomeration economies on technical efficiency of manufacturing firms: evidence from Indonesia

    227222_227222.pdf (525.4Kb)
    Access Status
    Open access
    Authors
    Widodo, W.
    Salim, Ruhul
    Bloch, Harry
    Date
    2015
    Type
    Journal Article
    
    Metadata
    Show full item record
    Citation
    Widodo, W. and Salim, R. and Bloch, H. 2015. The effects of agglomeration economies on technical efficiency of manufacturing firms: evidence from Indonesia. Applied Economics. 47 (31): pp. 3258-3275.
    Source Title
    Applied Economics
    DOI
    10.1080/00036846.2015.1013614
    ISSN
    0003-6846
    School
    School of Economics and Finance
    Remarks

    The Version of Record of this manuscript has been published in Applied Economics (2015), http://www.tandfonline.com/10.1080/00036846.2015.1013614

    URI
    http://hdl.handle.net/20.500.11937/18095
    Collection
    • Curtin Research Publications
    Abstract

    This article examines the effects of agglomeration economies and industrial structure upon firm-level technical efficiency in the Indonesian manufacturing industry over the period 2004–2009. A stochastic production frontier and three channels of agglomeration economies consisting of specialization, diversity and competition are used. The empirical results show that the effects of specialization and diversity upon firm-level technical efficiency are positive and negative, respectively, indicating that specialization is more favourable than diversity for stimulating firms’ technical efficiency. Competition has a positive sign, showing that region with high levels of competition tend to be more conducive in accelerating firm-level technical efficiency. In terms of firm location, both dummy for urban region and industrial complex turn out to be positive, indicating that firms located in both areas are experienced higher technical efficiency. Both firm size and age also have positive effect upon technical efficiency

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