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Did Better Firms Enter the Indonesian Manufacturing Sector after the 1997-98 Crisis?

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  • Dionisius Narjoko

Abstract

Motivated by a concern that Indonesia is on the path to deindustrialisation, this article uses data from 1991 to 2009 to examine whether there were differences in the characteristics of entrants to the Indonesian manufacturing sector before and after the 1997-98 Asian financial crisis. It finds that entrants after the crisis were larger or less dependent on credit than their predecessors, suggesting that they were more resilient to economic shocks. Yet entrants after the crisis exported relatively less than their predecessors. Meanwhile, productivity levels were the same before and after the crisis, indicating that entrants were able to match the productivity level of incumbents. Contrary to the concerns about deindustrialisation, these characteristics may simply reflect a dynamic that resulted in better or more resilient firms entering the industry after the crisis.

Suggested Citation

  • Dionisius Narjoko, 2014. "Did Better Firms Enter the Indonesian Manufacturing Sector after the 1997-98 Crisis?," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 50(3), pages 371-391, December.
    • Handle: RePEc:taf:bindes:v:50:y:2014:i:3:p:371-391
    DOI: 10.1080/00074918.2014.980379
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    Cited by:

    1. Axelsson, Tobias & Palacio, Andrés, 2017. "Transforming Indonesia: Structural change in a regional perspective 1968-2010," Lund Papers in Economic History 164, Lund University, Department of Economic History.
    2. Dionisius Narjoko & Titik Anas & Robertus Herdiyanto, 2018. "The Elusive Pursuit of Import Substitution in 21st Century Indonesia," Asian Economic Papers, MIT Press, vol. 17(1), pages 73-93, Winter/Sp.
    3. Aloysius Gunadi Brata & Henri L. F. De Groot & Wouter Zant, 2018. "Shaking up the Firm Survival: Evidence from Yogyakarta (Indonesia)," Economies, MDPI, vol. 6(2), pages 1-14, April.
    4. Gupta, Krisna & Gretton, Paul & Patunru, Arianto, 2022. "Projecting the long run impact of an economic reform: the case of the Indonesian Omnibus Law and concurrent changes in trade policy," Conference papers 333472, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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