Spillover Effect of foreign direct investment on Domestic Firms: Aggregate and Disaggregate Analysis

., Suyanto (2017) Spillover Effect of foreign direct investment on Domestic Firms: Aggregate and Disaggregate Analysis. In: The 4th International Conference on Business, Economics and Social Science, 9-10 Agustus 2017, Tentrem Hotel, Jogjakarta.

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Abstract

This research examines the spillover effects of foreign direct investment (FDI) on the productivity of local firms in East Java. It seeks to provide insight into the aggregate and disaggregate analyses of the spillover effects. At the aggregate level, the spillover effects on firms’ productivity are evaluated for all firms in manufacturing industries. At the disaggregate level, the spillover effects are examined for firms in nine specific industries. Two measures of spillover effects are applied in gaining a comprehensive analysis on the productivity advantages. The impact of FDI on productivity level is analyzed to gain insight into the long-run spillover effects, while the impact of FDI on productivity growth is to detect the short-run effects. There are five important findings of this study: (1) there is indication of a positive productivity spillover from FDI on local firms; (2) the labour-intensive industries tend to receive negative spillover effects, whereas the capital-intensive industries tend to gain positive spillover effects; (3) the total factor productivity growth (TFPG) of firms in East Java is sourced mainly from the scale efficiency change (SEC); (4) the spillover effects of FDI are mainly scale-efficiency knowledge and technological knowledge; (5) the technical efficiency knowledge tends to be a long-run effect rather than a short-run.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: spillover effects, foreign direct investment, manufacturing industry, east java
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Business and Economic > Department of Economic
Depositing User: Suyanto 3198
Date Deposited: 11 Sep 2017 08:59
Last Modified: 11 Sep 2017 08:59
URI: http://repository.ubaya.ac.id/id/eprint/30678

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