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Local Knowledge Spillovers in the Indonesian Manufacturing Industry

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Author Info
Bee Yan Aw (The Pennsylvania State University)
Alfons Palangkaraya () (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

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Abstract

Theoretical models have long shown that knowledge spillovers are of great economic importance to sustained economic growth and innovation and that these spillovers may be facilitated by physical and technological proximity. However, local knowledge spillovers have not been identified using data from developing countries. In this paper, we examine the relationship between knowledge spillovers and both technological and geographical proximities using micro panel data of Indonesian manufacturing plants between 1990 and 1995. We find both physical and technological proximity are significant. Knowledge spillovers are stronger among plants in the same industrial sector and their magnitude decreases monotonically with geographical distance.

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Publisher Info
Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2004n18.

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Length: 30 pages
Date of creation: Aug 2004
Date of revision:
Handle: RePEc:iae:iaewps:wp2004n18

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  11. Bart Verspagen & Marjolein C.J. Cani, ls, 2001. "Barriers to knowledge spillovers and regional convergence in an evolutionary model," Journal of Evolutionary Economics, Springer, vol. 11(3), pages 307-329. [Downloadable!] (restricted)
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    • Robert J. Barro & Paul M. Romer, 1991. "Economic Growth," NBER Books, National Bureau of Economic Research, Inc, number barr91-1.
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  15. David H. Good & M. Ishaq Nadiri & Robin C. Sickles, 1996. "Index Number and Factor Demand Approaches to the Estimation of Productivity," NBER Working Papers 5790, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  17. Luc Anselin, 2000. "Geographical Spillovers and University Research: A Spatial EconometricPerspective," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 31(4), pages 501-515. [Downloadable!] (restricted)
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  19. Sjoholm, Fredrik, 1999. "Productivity Growth in Indonesia: The Role of Regional Characteristics and Direct Foreign Investment," Economic Development and Cultural Change, University of Chicago Press, vol. 47(3), pages 559-84, April.
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