Clustering and firm productivity spillovers in Indonesian manufacturing

Suyanto, Suyanto and Sugiarti , Yenny and Setyaningrum, Idfi (2021) Clustering and firm productivity spillovers in Indonesian manufacturing. Heliyon, 7 (3). pp. 1-10. ISSN 2405-8440

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Earlier studies on foreign direct investment (FDI) andfirm productivity have mainly focused on the generalimpacts of FDI on localfirms’productivity. This current research extends the existing literature by examining theheterogeneity issue infirm productivity by clustering Indonesian manufacturingfirms into nine industrial groups.Two estimation methods are applied: stochastic frontier analysis and panel data analysis, which emerge three keyfindings. Firstly, the impacts of FDI vary amongfirm clusters, with six out of nine clusters are able to grasp thepositive benefits of FDI, whereas three out of nine clusters experience negative productivity effects. Secondly, thelabor-intensive clusters tend to receive negative productivity effects, whereas the capital-intensives clustersreceive positive productivity impacts. Thirdly, the sources of FDI-productivity vary across clusters, with scale-efficiency as the most dominant source and technology advancement as the second dominant source. Thesefindings justify the importance of estimatingfirms in homogenous industrial groups to gain precisionfindings ofproductivity benefits.

Item Type: Article
Uncontrolled Keywords: Foreign direct investment, Firms productivity, Clusters
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
Divisions: Faculty of Business and Economic > Department of Economic
Depositing User: Suyanto 3198
Date Deposited: 17 Mar 2021 07:10
Last Modified: 24 Mar 2021 16:34

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