The effects of agglomeration economies on technical efficiency of manufacturing firms: evidence from Indonesia
MetadataShow full item record
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
The Version of Record of this manuscript has been published in Applied Economics (2015), http://www.tandfonline.com/10.1080/00036846.2015.1013614
Showing items related by title, author, creator and subject.
Agglomeration economies, firm-level efficiency and productivity growth: empirical evidence from IndonesiaWidodo, Wahyu (2013)This thesis examines the effect of agglomeration economies on firm-level efficiency and productivity growth in Indonesian manufacturing industries. The stochastic production frontier (SPF), Färe-Primont productivity index ...
Suatmi, B.; Bloch, Harry; Salim, Ruhul (2017)This article examines the impact of trade reform on technical efficiency on the Indonesian chemicals industry using firm-level panel data. The effects of trade reform on technical efficiency are analysed using a stochastic ...
Which firms benefit from foreign direct investment? Empirical evidence from Indonesian manufacturingSuyanto; Salim, Ruhul; Bloch, Harry (2014)Despite growing concern regarding the productivity benefits of foreign direct investment (FDI), very few studies have been conducted on the impact of FDI on firm-level technical efficiency. This study helps fill this gap ...