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FDI and the Dynamics of Productivity: Microeconomic Evidence

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  • Okamoto, Yumiko

    (Department of Economics, GSID, Nagoya University)

  • Sjöholm, Fredrik

    ()
    (The European Institute of Japanese Studies)

Abstract

This paper examines productivity growth in the Indonesian manufacturing sector. We use a longitudinal data set to calculate the effects on aggregate manufacturing productivity growth from improvements within establishments, from reallocation of market shares, and from the turnover of plants. The difference between domestic and foreign owned plants is examined together with a calculation of the foreign owned plants' contribution to overall productivity growth. Productivity growth is mainly explained by reallocation of market shares and from turnover of plants. In addition, we find foreign plants to contribute significantly to overall productivity growth and there is a difference in the causes to productivity growth between foreign and domestic plants.

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Bibliographic Info

Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 348.

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Length: 32 pages
Date of creation: 02 Dec 1999
Date of revision:
Publication status: Published as Okamoto, Yumiko and Fredrik Sjöholm, 'FDI and the Dynamics of Productivity in Indonesian Manufacturing' in Journal of Development Studies, 2005, pages 160-182.
Handle: RePEc:hhs:hastef:0348

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Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Phone: +46-(0)8-736 90 00
Fax: +46-(0)8-31 01 57
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Web page: http://www.hhs.se/
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Related research

Keywords: Productivity growth; Plants; Turnover; Manufacturing; Indonesia;

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References

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Citations

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Cited by:
  1. Joshua Aizenman & Mark M. Spiegel, 2006. "Institutional Efficiency, Monitoring Costs and the Investment Share of FDI," Review of International Economics, Wiley Blackwell, vol. 14(4), pages 683-697, 09.
  2. Mahmut Yasar & Roderick Rejesus & Ilhami Mintemur, 2004. "Is there evidence of creative destruction in the Turkish manufacturing sector? Lessons from a cross-industry analysis of aggregate productivity growth," Applied Economics, Taylor & Francis Journals, vol. 36(17), pages 1937-1945.
  3. Robert E. Lipsey, 2002. "Home and Host Country Effects of FDI," NBER Working Papers 9293, National Bureau of Economic Research, Inc.

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