Foreign direct investment spillovers and technical efficiency in the Indonesian pharmaceutical sector: firm level evidence

., Suyanto (2013) Foreign direct investment spillovers and technical efficiency in the Indonesian pharmaceutical sector: firm level evidence. Applied Economics., 45 (3). pp. 383-395. ISSN ISSN 0003–6846 print/ISSN 1466–4283 online

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Official URL: http://www.tandfonline.com/doi/abs/10.1080/0003684...

Abstract

The spillovers of Foreign Direct Investment (FDI) on domestic firms’ performances have been highly debated for many years. This article contributes to this debate by analysing spillovers effects on technical efficiency of Indonesian pharmaceutical sector using a unique unbalanced panel of highly disaggregated (at five-digit International Standard Industrial Classification (ISIC)) 210 firms over the period 1990--1995 (1001 observations). The Stochastic Production Frontier (SPF) and the Data Envelopment Analysis (DEA) based on Malmquist Productivity Indices (MPI) have been used to test the spillovers effects of FDI on technical efficiency. The empirical results from the SPF show that foreign firms are more efficient than domestic competitors, and the presence of the former increases the inefficiency of the latter. Similarly the results from the MPI demonstrate that FDI has a negative and significant impact on technical efficiency changes in domestic competitors, but generate positive spillovers to domestic suppliers.

Item Type: Article
Uncontrolled Keywords: FDI spillovers; technical efficiency; stochastic frontier; Malmquist productivity index
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Business and Economic > Department of Economic
Depositing User: Suyanto 3198
Date Deposited: 23 May 2016 07:57
Last Modified: 20 Nov 2017 11:04
URI: http://repository.ubaya.ac.id/id/eprint/27786

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