IDEAS home Printed from https://ideas.repec.org/p/tin/wpaper/19970035.html
   My bibliography  Save this paper

Explaining Employment Growth in Small Industrial Enterprises: Does Policy Matter? A Case Study for Central Java

Author

Listed:
  • Piet Rietveld
  • Youdi Schipper

    (Vrije Universiteit Amsterdam)

Abstract

Small-scale and cottage industries (SSMI) have received a considerable amount of attention in development strategies and policies in many countries. One of the main arguments in favour of small scale production is its potential to create employment, as it uses more labour per unit of output. Although the empirical evidence in the debate around the allocative efficiency of smallscale production is not unambiguous, scale-biased (macro) economic environments favouring large industries have been used as a justification for the promotion of small industries through direct assistence programmes.The effectiveness of small industry promotion programmes has received mixed judgements. One the one hand, (government) assistance has been praised as having "..a favourable effect on employment.." in small enterprises (Pernia and Pernia, 1986), while, according to others (UNDP et al., 1988), it may present in many cases an "..ineffective palliative.." for unfavourable demandconditions of (rural) SSMI. These evaluations are, however, not entirely comparable, since the latter one is an "..overall, qualitative assessment.." using effectiveness criteria such as outreach,assimilability, impact, sustainability, while the former one is based on a quantitative analysis of economic and social impact. This analysis of impact can thus be seen as part of a broad policy evaluation.This paper attempts to contribute to the debate around the impact of small industry promotion, using evidence concerning small industry assistence programmes in Central-Java, Indonesia. The analysis is based on the data set employed in Sandee et al. (1994); the selection of data and the methods used are different, however.In the next section, some remarks on economic impact analysis as a policy evaluation tool are made. Then, the organization and contents of small industry programmes in Indonesia are described in short. This is followed by a description of the field survey, the data, specifications and methodology used, a discussion of the results and some concluding remarks.

Suggested Citation

  • Piet Rietveld & Youdi Schipper, 1997. "Explaining Employment Growth in Small Industrial Enterprises: Does Policy Matter? A Case Study for Central Java," Tinbergen Institute Discussion Papers 97-035/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:19970035
    as

    Download full text from publisher

    File URL: https://papers.tinbergen.nl/97035.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Schmitz, Hubert, 1982. "Growth constraints on small-scale manufacturing in developing countries: a critical review," World Development, Elsevier, vol. 10(6), pages 429-450, June.
    2. Sandee, H., 1994. "Promoting small scale and cottage industries in Indonesia : an impact analysis for central Java," Serie Research Memoranda 0010, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    3. Pernia, Ernesto M. & Pernia, Joseph M., 1986. "An economic and social impact analysis of small industry promotion: A Philippine experience," World Development, Elsevier, vol. 14(5), pages 637-651, May.
    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. Alia El Mahdi & Magued Osman, 2003. "An Assessment of the Effectiveness of Small and Micro-Enterprise Finance in Employment Creation," Working Papers 0313, Economic Research Forum, revised 05 Jan 2003.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Van Diermen, Peter, 1997. "Labor remuneration in Jakarta's small enterprises: Exploitative or equitable?," World Development, Elsevier, vol. 25(12), pages 2129-2141, December.
    2. Alia El Mahdi & Magued Osman, 2003. "An Assessment of the Effectiveness of Small and Micro-Enterprise Finance in Employment Creation," Working Papers 0313, Economic Research Forum, revised 05 Jan 2003.
    3. repec:ilo:ilowps:288872 is not listed on IDEAS
    4. repec:ilo:ilowps:276547 is not listed on IDEAS
    5. Amjad, Rashid, 1984. "Small-scale industries and rural development: implications for rural industrialisation in Pakistan," MPRA Paper 39178, University Library of Munich, Germany.
    6. Paula Kantor, 2002. "Gender, Microenterprise Success and Cultural Context: The Case of South Asia," Entrepreneurship Theory and Practice, , vol. 26(4), pages 131-143, July.
    7. Navas-Alemán, Lizbeth & Pietrobelli, Carlo & Kamiya, Marco, 2012. "Inter-Firm Linkages and Finance in Value Chains," IDB Publications (Working Papers) 4067, Inter-American Development Bank.
    8. Nadvi K., 1992. "Flexible specialisation, industrial districts and employment in Pakistan," ILO Working Papers 992888723402676, International Labour Organization.
    9. Isleide Zissimos, 2011. "The Advantages of Association: Know-How Sharing and Innovation Adoption in Four Brazilian Cities," Vanderbilt University Department of Economics Working Papers 1103, Vanderbilt University Department of Economics.
    10. Kung'U, Gabriel Kamau, 2011. "Factors influencing SMEs access to finance: A case study of Westland Division,Kenya," MPRA Paper 66633, University Library of Munich, Germany, revised 2014.
    11. Kathuria, Vinish & Rajesh Raj, S.N. & Sen, Kunal, 2013. "The effects of economic reforms on manufacturing dualism: Evidence from India," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1240-1262.
    12. Albert Berry & Edgard Rodriguez & Henry Sandee, 2001. "Small And Medium Enterprise Dynamics In Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 37(3), pages 363-384.
    13. Daniela Rodica Silivestru(Popescu), 2012. "Bank Loans And Small Firm Financing In Romania," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(14), pages 1-15.
    14. Abla Abdel-Latif & Hubert Schmitz, 2010. "The Politics of Investment and Growth in Egypt: Towards A New Approach," Working Papers 546, Economic Research Forum, revised 09 Jan 2010.
    15. Egbetokun, Abiodun A., 2015. "Interactive learning and firm-level capabilities in latecomer settings: The Nigerian manufacturing industry," Technological Forecasting and Social Change, Elsevier, vol. 99(C), pages 231-241.
    16. Tulus Tambunnan, 2007. "Trade and Investment Liberalization Effects on SME Development: A Literature Review and a Case Study of Indonesia," Working Papers 4207, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    17. Homi Katrak, 1999. "Small-scale enterprise policy in developing countries: an analysis of India's reservation policy," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(5), pages 701-715.
    18. Kantor, Paula., 2001. "Promoting women's entrepreneurship development based on good practice programmes : some experiences from the North to the South," ILO Working Papers 993457023402676, International Labour Organization.
    19. Sandee, H., 1994. "Promoting small scale and cottage industries in Indonesia : an impact analysis for central Java," Serie Research Memoranda 0010, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    20. Rajesh SN Raj & Kunal Sen, 2016. "Moving out of the bottom of the economy? Constraints to firm transition in the Indian informal manufacturing sector," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-20, December.
    21. Takao FUKUCHI, 1998. "A Simulation Analysis Of The Urban Informal Sector," The Developing Economies, Institute of Developing Economies, vol. 36(3), pages 225-256, September.
    22. Weijland, H., 1985. "Rural industry and its agricultural base : an inquiry into a new field of research in development economics," Serie Research Memoranda 0024, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.

    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:tin:wpaper:19970035. 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: Tinbergen Office +31 (0)10-4088900 (email available below). General contact details of provider: https://edirc.repec.org/data/tinbenl.html .

    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.