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Productivity Growth in Indonesia: The Role of Regional Characteristics and Direct Foreign Investment

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  • Sjöholm, Fredrik

    (The European Institute of Japanese Studies)

Abstract

Using detailed micro data from the Indonesian manufacturing sector, we examine the effect on productivity growth of different regional characteristics and direct foreign investment. The results suggest that a diversified regional industry sector increase productivity growth. Direct foreign investment benefits establishments in neighbouring industries within the region. There are intra-industry spillovers from direct foreign investment at a national level, but there does not seem to be a geographic component in this type of spillovers.

Suggested Citation

  • Sjöholm, Fredrik, 1998. "Productivity Growth in Indonesia: The Role of Regional Characteristics and Direct Foreign Investment," SSE/EFI Working Paper Series in Economics and Finance 216, Stockholm School of Economics.
  • Handle: RePEc:hhs:hastef:0216
    Note: Revised version forhtcoming in Economic Development and Cultural Change (jan, 1999).
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    Keywords

    Indonesia; regional development; direct foreign investment; spillovers; productivity;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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