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Plant Entry in a More Liberalised Industrialisation Process: An Experience of Indonesian Manufacturing during the 1990s

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  • Dionisius A. NARJOKO

    ()
    (Centre for Strategic and International Studies, Indonesia)

Abstract

Some major policy changes towards a more open trade and investment regime occurred in Indonesia during the 1980s and 1990s. The impact of these policy changes on the country's industrialisation has been generally favourable. However, little is known about the impact on the dynamics of plant in the country's manufacturing. This study addresses this subject, examining the extent and determinants of plant entry in Indonesian manufacturing over the period 1993-96, and asking how the policy reforms affected plant entry. The key finding suggests that the policy reforms increased the extent of competition within industry. This, however, does not seem to be very strong, and the study puts forward some possible explanations. The discussion reaches a consensus that maybe, during the period under this study, the process of the reform had not really been completed and, at the same time, the (predicted) positive impact of the liberalisation had not been fully realised.

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Bibliographic Info

Paper provided by Economic Research Institute for ASEAN and East Asia (ERIA) in its series Working Papers with number d009.

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Date of creation: 2009
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Handle: RePEc:era:wpaper:d009

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Keywords: Firm-level data; Globalization; Productivity.;

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  1. Baldwin, John R. & Gorecki, Paul K., 1987. "Plant creation versus plant acquisition : The entry process in canadian manufacturing," International Journal of Industrial Organization, Elsevier, vol. 5(1), pages 27-41, March.
  2. Julio J. Rotemberg & Michael Woodford, 1989. "Oligopolistic Pricing and the Effects of Aggregate Demand on Economic Activity," NBER Working Papers 3206, National Bureau of Economic Research, Inc.
  3. Tybout, James & de Melo, Jamie & Corbo, Vittorio, 1991. "The effects of trade reforms on scale and technical efficiency : New evidence from Chile," Journal of International Economics, Elsevier, vol. 31(3-4), pages 231-250, November.
  4. B. Curtis Eaton & Richard G. Lipsey, 1980. "Exit Barriers are Entry Barriers: The Durability of Capital as a Barrier to Entry," Bell Journal of Economics, The RAND Corporation, vol. 11(2), pages 721-729, Autumn.
  5. Louri, H. & Anagnostaki, V., 1995. "Entry and exit from Greek manufacturing industry: a test of the symmetry hypothesis," MPRA Paper 40575, University Library of Munich, Germany.
  6. Leslie E. Papke & Jeffrey M. Wooldridge, 1993. "Econometric Methods for Fractional Response Variables with an Application to 401(k) Plan Participation Rates," NBER Technical Working Papers 0147, National Bureau of Economic Research, Inc.
  7. Mata, Jose, 1993. "Entry and type of entrant : Evidence from Portugal," International Journal of Industrial Organization, Elsevier, vol. 11(1), pages 101-122, March.
  8. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
  9. Shapiro, Daniel & Khemani, R. S., 1987. "The determinants of entry and exit reconsidered," International Journal of Industrial Organization, Elsevier, vol. 5(1), pages 15-26, March.
  10. Steven Globerman & John C. Ries & Ilan Vertinsky, 1994. "The Economic Performance of Foreign Affiliates in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 27(1), pages 143-56, February.
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