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Fuel price increase and manufacturing firms survival in Indonesia

Author

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  • Eko Atmadji

    (Fakultas Ekonomi, Universitas Islam Indonesia)

Abstract

The administered price of fuel has increased quite frequently since 1970. It has raised a concern on the survival ability of manufacturing firms that could be weakened by such policy. This research objective is for confirming whether the policy of increasing fuel price affects the survival of manufacturing firms in Indonesia. By using an Instrumental Variable Probit Model, it demonstrates that increasing fuel price does not affect firms’ survival in the short-run, middle-run, as well as longrun. Nevertheless, the z-statistics increase when the period of estimation is expanded. It means that if the time span of sample observation is widened, the result might be different.

Suggested Citation

  • Eko Atmadji, 2012. "Fuel price increase and manufacturing firms survival in Indonesia," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 4(1), pages 2-14, April.
    • Handle: RePEc:uii:journl:v:4:y:2012:i:1:p:2-14
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Fuel price; survival ability; instrumental variable probit model;
    All these keywords.

    JEL classification:

    • H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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