IDEAS home Printed from https://ideas.repec.org/a/taf/bindes/v49y2013i3p329-354.html

The role of foreign direct investment in Indonesia's manufacturing exports

Author

Listed:
  • Rudy Rahmaddi
  • Masaru Ichihashi

Abstract

This article examines whether foreign direct investment (FDI) has contributed to the changing structure of Indonesia's manufacturing exports. It uses industry-level data from 1990 to 2008, classified by factor intensity. Our analysis reveals that FDI promotes exports in most panel observations, especially exports from physical-capital-intensive (PCI), human-capital-intensive (HCI) and technology-intensive (TI) industries. Yet by applying a differentiated cross-section-effect model, we determine that the export-generating potential of FDI is stronger in PCI, HCI and TI industries than in natural-resource-intensive or unskilled-labour-intensive industries, in which Indonesia has a comparative advantage. We also assess the influence of other determinants of export performance -- namely, private domestic capital investment, GDP growth and exchange rates. Our findings have implications for policymakers seeking to sustain Indonesia's export performance.

Suggested Citation

  • Rudy Rahmaddi & Masaru Ichihashi, 2013. "The role of foreign direct investment in Indonesia's manufacturing exports," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 49(3), pages 329-354, December.
    • Handle: RePEc:taf:bindes:v:49:y:2013:i:3:p:329-354
    DOI: 10.1080/00074918.2013.850632
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00074918.2013.850632
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00074918.2013.850632?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. repec:wbk:wbpubs:2283 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Güzin Bayar, 2022. "Turkey's sectoral exports: A competitiveness approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 2268-2289, April.
    2. René Cabral & Jorge Alberto Alvarado, 2021. "The Role of FDI on Exports Performance: Evidence from the Mexican States," International Regional Science Review, , vol. 44(6), pages 684-708, November.
    3. Sayed Farrukh Ahmed & A. K. M. Mohsin & Syed Far Abid Hossain, 2023. "Relationship between FDI Inflows and Export Performance: An Empirical Investigation by Considering Structural Breaks," Economies, MDPI, vol. 11(3), pages 1-17, February.
    4. Rossanto Dwi Handoyo & Kabiru Hannafi Ibrahim & Yessi Rahmawati & Faizal Faadhillah & Keiichi Ogawa & Deni Kusumawardani & Kok Fong See & Vikniswari Vija Kumaran & Rachita Gulati, 2024. "Determinants of exports performance: Evidence from Indonesian low-, medium-, and high-technology manufacturing industries," PLOS ONE, Public Library of Science, vol. 19(1), pages 1-24, January.
    5. Cengiz Orhan & Parlińska Agnieszka, 2025. "Does Globalization Hinder or Incentive Industrialization? Empirical Evidence from Turkiye and Poland," Folia Oeconomica Stetinensia, Paradigm, vol. 25(2), pages 48-76.
    6. Cabral Torres René & Alvarado Jorge, 2019. "Manufacturing Exports Determinants across Mexican States, 2007-2015," Working Papers 2019-11, Banco de México.
    7. Gurpriya Sadana & Jaydeep Mukherjee, 2024. "Relationship between FDI Inflows and Exports at Subnational / State Level: A Case Study on the Indian Economy," Working Papers 2470, Indian Institute of Foreign Trade.
    8. Güzin Bayar, 2018. "Estimating export equations: a survey of the literature," Empirical Economics, Springer, vol. 54(2), pages 629-672, March.
    9. Shinta R. I. Soekro & Triono Widodo, 2015. "Mapping And Determinants Of Intra-Asean Foreign Direct Investment (FDI): Indonesia Case Study," Working Papers WP/12/2015, Bank Indonesia.
    10. Sherina Rafidah Khairunnisa & Siskarossa Ika Oktora, 2023. "Could Renewable Energy Use Boost Goods Export Performance in ASEAN?," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 69, pages 146-162, December.
    11. Radovan Kastratović, 2020. "The impact of foreign direct investment on host country exports: A meta‐analysis," The World Economy, Wiley Blackwell, vol. 43(12), pages 3142-3183, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:bindes:v:49:y:2013:i:3:p:329-354. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CBIE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.