Sources of productivity gains from FDI in Indonesia: is it efficiency improvement or technological progress?
MetadataShow full item record
This article investigates the spillover effects of foreign direct investment (FDI) on productivity growth in the Indonesian food-processing (ISIC 311) and electrical machinery industries (ISIC 383). Total factor productivity (TFP) growth is decomposedinto efficiency change and technological change by using the Malmquist productivity index. The empirical results show that efficiency improvement is the major driver of TFP growth in the food-processing industry, whereas technological progress is the dominant contributor in the electrical machinery industry. There are positive spillovers on efficiency change but negative spillovers on technological change in the food-processing industry. However, FDI spillovers turn out to be negative in efficiency change while positive in technological progress in the electrical machinery industry.These findings demonstrate that different industries experience different sources of productivity gains, which are dependent on the characteristics of firms in the industry.
Showing items related by title, author, creator and subject.
Foreign direct investment spillovers and productivity growth in Indonesian garment and electronics manufacturingSuyanto; Bloch, Harry; Salim, Ruhul (2012)Inflows of foreign direct investment generate externalities that spill over to domestic firms and raise their productivity. This article examines the extent of spillover effects of foreign direct investment for firms in ...
Suyanto, Suyanto; Salim, Ruhul; Bloch, Harry (2009)This paper examines whether spillovers from foreign direct investment (FDI) make any contribution to productivity growth in the Indonesian chemical and pharmaceutical firms using plant-level panel data. The spillover ...
Xiao, H.; Wang, J.; Oxley, Leslie; Ma, H. (2012)Following reforms to the market, China's hog industry has developed rapidly, however, with social and economic transitions, China's hog industry is facing challenges which might restrict long-term growth in production. ...