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Does Democratisation Promote Competition? Evidence from Indonesia
[Democracy and firm productivity: evidence from Indonesia’]

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  • Mary Hallward-Driemeier
  • Anna Kochanova
  • Bob Rijkers

Abstract

Does democratisation promote economic competition? This paper documents that the disruption of political connections associated with Suharto's fall had a modest pro-competitive effect on Indonesian manufacturing industries. Firms with connections to Suharto lost substantial market share following his resignation. Industries in which Suharto family firms had larger market share during his tenure exhibited weak improvements in broader measures of competition in the post-Suharto era relative to industries in which Suharto firms had not been important players.

Suggested Citation

  • Mary Hallward-Driemeier & Anna Kochanova & Bob Rijkers, 2021. "Does Democratisation Promote Competition? Evidence from Indonesia [Democracy and firm productivity: evidence from Indonesia’]," The Economic Journal, Royal Economic Society, vol. 131(640), pages 3296-3321.
  • Handle: RePEc:oup:econjl:v:131:y:2021:i:640:p:3296-3321.
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    File URL: http://hdl.handle.net/10.1093/ej/ueab023
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    Cited by:

    1. Paul Pelzl & Steven Poelhekke, 2023. "Democratization, leader education and growth: firm-level evidence from Indonesia," Journal of Economic Growth, Springer, vol. 28(4), pages 571-600, December.

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