Globalization and Innovation in Indonesia: Evidence from Micro-Data on Medium and Large Manufacturing Establishments
AbstractIn this paper we examine the impact of globalization on innovation in the Indonesian manufacturing sector. The lack of innovation data in the manufacturing survey has necessitated the use of R&D expenditure as an input in the innovation production function. Globalization is represented by being exporters, FDI and effective rate of protection (EPR). The model is set up such as within the concept of R&D as conditional input demand function, allowing labor productivity to have impact on R&D. In this case we find that less productive firms are less likely to venture into R&D activities. In terms of globalization variables we find that being exporters is important determinant of R&D. Meanwhile the impact of FDI firms on domestic R&D is only on the incidence not on the intensity of R&D. It will require a critical mass of firms within a location or an agglomeration to have a meaningful impact. Also lower ERP would induce firms to spend more on R&D. So lowering protection or trade barriers will have positive impact on R&D.
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Bibliographic InfoPaper provided by Economic Research Institute for ASEAN and East Asia (ERIA) in its series Working Papers with number DP-2012-09.
Length: 35 pages.
Date of creation: 01 Jun 2012
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-08-23 (All new papers)
- NEP-INO-2012-08-23 (Innovation)
- NEP-KNM-2012-08-23 (Knowledge Management & Knowledge Economy)
- NEP-SEA-2012-08-23 (South East Asia)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gustavo Crespi & Chiara Criscuolo & Jonathan Haskel, 2006.
"Productivity, Exporting and the Learning-by-Exporting Hypothesis: Direct Evidence from UK Firms,"
CEP Discussion Papers
dp0726, Centre for Economic Performance, LSE.
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- Gustavo Crespi & Chiara Criscuolo & Jonathan Haskel, 2006. "Productivity, Exporting and the Learning-by-Exporting Hypothesis: Direct Evidence from UK Firms," Working Papers 559, Queen Mary, University of London, School of Economics and Finance.
- Crepon, Bruno & Duguet, Emmanuel, 1997. "Estimating the Innovation Function from Patent Numbers: GMM on Count Panel Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(3), pages 243-63, May-June.
- Jože P. Damijan & Črt Kostevc & Sašo Polanec, 2010. "From Innovation to Exporting or Vice Versa?," The World Economy, Wiley Blackwell, vol. 33(3), pages 374-398, 03.
- Megan MacGarvie, 2006. "Do Firms Learn from International Trade?," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 46-60, February.
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