Do local suppliers and local buyers benefit from foreign direct investment?: evidence from Indonesia

Suyanto, Suyanto; Sugiarti, Yenny

doi:10.2991/insyma-18.2018.54

Cited by 4 publications

(7 citation statements)

References 12 publications

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“…Foreign ownership induces output productivity in Indonesian manufacturing firms. This result justifies the theoretical arguments of Caves (1974) and Blomstrom and Kokko (2003) and consistent with findings of previous studies about Indonesia by Suyanto et al, 2014;Sari et al,2016;Suyanto and Sugiarti, 2018) and elsewhere by Khalifah et al, 2015 for Malaysia;Kim, 2015 for South Korea; Liang, 2017 for China.…”

Section: Resultssupporting

confidence: 92%

“…The findings of the input coefficients are consistent with the neoclassical production theory that pinpoints input variables have positive impacts on output, with the elasticity of input to output is less than one for each input, as stated in Nicholson and Synder (2017). The findings are also in line with previous empirical studies on Indonesian manufacturing firms by Sari et al (2016), Suyanto et al (2014), and Suyanto and Sugiarti (2018.…”

Section: Resultssupporting

confidence: 92%

“…The current research on this area utilizes the panel data of firms in a specific country. Khalifah et al (2015) examined the FDI effects on local firm in Malaysia, Kim (2015) evaluated those effects in South Korea, Liang (2017) pointed out the Chinese firms, whereas Suyanto et al (2014) Sari et al (2016), and Suyanto and Sugiarti (2018) analyzed the FDI productivity effects in Indonesia. From the theoretical foundation and the previous empirical studies, the impact of foreign ownership on firms' productivity is hypothesized as follows:…”

Section: 3mentioning

confidence: 99%

See 2 more Smart Citations

Indonesian Firms in Facing Globalization: Do Foreign Ownership and Export Matter?

Suyanto¹,

Sugiarti²

2020

Proceedings of the 17 Th International Symposium on Management (INSYMA 2020)

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Section: Resultssupporting

confidence: 92%

Section: Resultssupporting

confidence: 92%

Section: 3mentioning

confidence: 99%

See 1 more Smart Citation

Indonesian Firms in Facing Globalization: Do Foreign Ownership and Export Matter?

Suyanto¹,

Sugiarti²

2020

Proceedings of the 17 Th International Symposium on Management (INSYMA 2020)

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“…The similar finding is presented by for manufacturing firms in Vietnam [5]. Justifies under the mythology of stochastic frontier that the firms in Indonesia manufacturing industries generate significant positive impact on local firms in upstream industries [11]. In contrast, shows that there is no indication of backward linkage of FDI firms to the local firms in upstream industries in China [12].…”

Section: A Related Literaturesupporting

confidence: 77%

“…This finding is supported by South Africa manufacturing firms. In Indonesia, shows an indication of forward linkages through efficiency and best-practice of FDI firms to local buyer firms [2,11]. The indication of forward linkage is appear to be stronger than the indication of backward linkages, as argued by [12].…”

Section: A Related Literaturementioning

confidence: 90%

Backward and Forward Linkages of Productivity Effect from Foreign Direct Investment

Suyanto¹,

Sugiarti²

2019

Proceedings of the 5th Annual International Conference on Management Research (AICMaR 2018)

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Productivity related to foreign direct investment (FDI) has been examined for the last two decades, but the findings are mixed. This paper contributes to shed the light by analyzing the backward and forward linkages of FDI-related productivity. By estimating manufacturing firms of Indonesia, the results shows that there is a positive backward linkage from FDI in local firms on domestic firms in upstream 3-digit industries. There is also a positive forward linkage from FDI in local firms in downstream industries. The findings implicate the demonstration effect and skill-training effect of foreign firms to local firms in the industrial line. The findings are robust under fixed effect model, general method of moment model, and instrumental variable model.

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Technical Inefficiency in Nine Clusters of Indonesian Manufacturing Firms And its Determinants: Stochastic Frontier Analysis

Astanto

Suyanto

Santoso

et al. 2022

JEP

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The current study examines the technical inefficiency of Indonesian manufacturing firms and its key determinants. Extending the previous research that mainly focuses on firms in a specific industry, the current study groups firms into nine industrial clusters and estimates them separately to find a variety of results among the clusters. The stochastic frontier analysis (SFA) method is applied to estimate the inefficiency score and the key determinants of 5,848 firms for five years (29,240 total observations). Data period ended in 2014 due to the substantial change in the classification code of the manufacturing industry in the survey by the Indonesian Central Board of Statistics. Five notable findings are recorded. First, the average efficiency score of all observed firms is 0.8815. Second, firm size is found to have a negative effect on inefficiency in the sample of all firms and three out of nine clusters (ISIC 34, ISIC 35, and ISIC 37). Third, foreign ownership generates a negative contribution to firms’ technical inefficiency in both the sample of all firms and the sample of each nine industrial clusters. Fourth, export orientation has various effects on firms across nine industrial clusters, with a dominant significant negative impact in paper and paper product industry (ISIC 34) and metal product industry (ISIC 38). Finally, import intensity provides a significant negative impact on firms in most industrial clusters. These findings support the argument on the importance of absorption capacity and unique firm characteristics in analyzing the impact of key determinants of technical inefficiency.

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Do local suppliers and local buyers benefit from foreign direct investment?: evidence from Indonesia

Cited by 4 publications

References 12 publications

Indonesian Firms in Facing Globalization: Do Foreign Ownership and Export Matter?

Indonesian Firms in Facing Globalization: Do Foreign Ownership and Export Matter?

Backward and Forward Linkages of Productivity Effect from Foreign Direct Investment

Technical Inefficiency in Nine Clusters of Indonesian Manufacturing Firms And its Determinants: Stochastic Frontier Analysis

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