The Demand Creation Effect on the Indonesian Manufacturing Industry
Downloads
This study analyzes the impact of Foreign Direct Investment that creates a demand creation effect on domestic companies in the Indonesian manufacturing industry in 2010-2015. This study uses Input and Output data for 2010 and Industri Besar Sedang data in 2010-2015, both of which come from the Badan Pusat Statistik. The Fixed Effects model came out as the best model because it reflected different firm characteristics. The study concludes that the larger the foreign presence and the firm's size in an industry, the more demand-creating effect it will create. However, FDI enters highly concentrated industries and industries with high levels of imports, which will negatively affect the demand creation effect.
Anwar, S., & Sun, S. (2012). FDI and market entry/exit: Evidence from China. Journal of Asian Economics, 23(5), 487-498.
Ayyagari, M., & Kosová, R. (2010). Does FDI Facilitate Domestic Entry? Evidence from the Czech Republicroie_854. Review of International Economics, 18(1), 14-29.
Backer, K. D., & Sleuwaegen, L. (2003). Does Foreign Direct Investment Crowd Out Domestic Entrepreneurship? Review of Industrial Organization, 22, 67-84.
Badan Koordinasi Penanaman Modal. (2021). Data Statistik [Statistics Data]. Retrieved from National Single Window for Investment: https://nswi.bkpm.go.id/data_statistik
Badan Pusat Statistik. (2022). Industri Besar dan Sedang [Medium and Big Industries]. Retrieved from Badan Pusat Statistik: https://www.bps.go.id/subject/9/industri-besar-dan-sedang.html
Blomstrom, M., & Persson, H. (1983). Foreign Investment and Spillover Efficiency in an Underdeveloped Economy: Evidence from the Mexican Manufacturing Industry. World Development, 11(6), 493-501.
Choi, H. (2018). Does FDI crowd out domestic firms? Micro-level evidence from the Republic of Korea. Journal of Korea Trade, 1-13.
Dunning, J. H. (1980). Toward an eclectic theory of international production: Some empirical tests. Journal of international business studies, 11(1), 9-31.
Harianto, S. K., & Sari, D. W. (2021). Dampak Spillover Penanaman Modal Asing terhadap Produktivitas Industri Manufaktur Medium-High Technology di Indonesia [The Impact of Foreign Investment Spillover on the Productivity of the Medium-High Technology Manufacturing Industry in Indonesia]. Samudra Ekonomi & Bisnis, 12(1), 1-17.
Hattari, R., & Rajan, R. S. (2013). How Different are FDI and FPI Flows?: Distance and Capital Market Integration. Journal of Economic Integration, 26(3), 499-525.
International Monetary Fund. (2004, September 1). Publications. Retrieved from International Monetary Fund: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/viewer.html?pdfurl=https%3A%2F%2Fwww.imf.org%2Fexternal%2Fpubs%2Fft%2Fbop%2F2004%2F04-31.pdf&clen=69694&chunk=true
Javorcik, B. S. (2008). To share or not to share: Does local participation matter for spillovers from foreign direct investment? Journal of Development Economics, 85(12), 194–217.
Kokko, A. (1994). Technology, Market Characteristics, and Spillovers. Journal of Development Economics, 279-293.
Li, C., & Luo, Y. (2019). Spillover Effects of Foreign Direct Investment: Evidence from the West Midlands of England . Economic Issues, Vol. 24, Part 1, 1-19.
Ni, B., Spatareanu, M., Manole, V., Otsuki, T., & Yamada, H. (2017). The Origin of FDI and Domestic Firms' Productivity”Evidence from Vietnam. Journal of Asian Economics, 1-46.
OECD. (2008). Annual Report 2008. OECD Publishing. https://www.oecd.org/newsroom/40556222.pdf
Republik Indonesia. (2007). Undang-Undang Republik Indonesia Nomor 25 Tahun 2007 Tentang Penanaman Modal [Law of the Republic of Indonesia Number 25 of 2007 About Investment].
Sari, D. W. (2019). The Potential Horizontal and Vertical Spillovers from Foreign Direct Investment on Indonesian Manufacturing Industries. Economic Papers, 1-12.
Sari, D. W., Khalifah, N. A., & Suyanto, S. (2016). The spillover effects of foreign direct investment on the firms' productivity performances. Journal of Productivity Analysis, 46, 199-233.
Sarwedi. (2002). Foreign Direct Investment in Indonesia and the Factors that Influence It. Jurnal Akuntansi & Keuangan, 4(1), 17-35.
Suyanto, Salim, R., & Bloch, H. (2014). Which firms benefit from foreign direct investment? Empirical evidence from Indonesian manufacturing. World Development, 33, 16-29.
Takii, S. (2005). Productivity spillovers and characteristics of foreign multinational plants in Indonesian manufacturing 1990–1995. Journal of Development Economics, 76(2), 521-542.
United Nations Conference on Trade and Development. (2012). Development and Globalization:Facts and Figure. Retrieved from United Nations UNCTAD: https://stats.unctad.org/Dgff2012/chapter1/1.2.html
World Bank. (1999). Global Economic Prospects and the Developing Countries. New York: Oxford University Press.
World Trade Organization. (1996). News and Events. Retrieved from World Trade Organization: https://www.wto.org/english/news_e/pres96_e/pr057_e.htm
Copyright (c) 2022 Lusi Sulistyaningsih, T.M. Zakir S. Machmud
This work is licensed under a Creative Commons Attribution 4.0 International License.
JDE (Journal of Developing Economies) (p-ISSN: 2541-1012; e-ISSN: 2528-2018) is licensed under a Creative Commons Attribution 4.0 International License
- The journal allows the author to hold the copyright of the article without restrictions.
- The journal allows the author(s) to retain publishing rights without restrictions
- The legal formal aspect of journal publication accessibility refers to Creative Commons Attribution (CC BY)