Which firms benefit from foreign direct investment? Empirical evidence from Indonesian manufacturing
Despite growing concern regarding the productivity benefits of foreign direct investment (FDI), very few studies have been conducted on the impact of FDI on firm-level technical efficiency. This study helps fill this gap by empirically examining the spillover effects of FDI on the technical efficien...
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| Format: | Journal Article |
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Elsevier
2014
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| Online Access: | http://hdl.handle.net/20.500.11937/43667 |
| _version_ | 1848756767967674368 |
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| author | Suyanto Salim, Ruhul Bloch, Harry |
| author_facet | Suyanto Salim, Ruhul Bloch, Harry |
| author_sort | Suyanto |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | Despite growing concern regarding the productivity benefits of foreign direct investment (FDI), very few studies have been conducted on the impact of FDI on firm-level technical efficiency. This study helps fill this gap by empirically examining the spillover effects of FDI on the technical efficiency of Indonesian manufacturing firms. A panel data stochastic production frontier (SPF) method is applied to 3318 firms surveyed over the period 1988–2000. The results reveal evidence of positive FDI spillovers on technical efficiency. Interesting differences emerge however when the samples are divided into two efficiency levels. High-efficiency domestic firms receive negative spillovers, in general, while low-efficiency firms gain positive spillovers. These findings justify the hypothesis of efficiency gaps, that the larger is the efficiency gap between domestic and foreign firms the easier the former extracts spillover benefits from the latter. |
| first_indexed | 2025-11-14T09:17:26Z |
| format | Journal Article |
| id | curtin-20.500.11937-43667 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T09:17:26Z |
| publishDate | 2014 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-436672019-02-19T05:35:06Z Which firms benefit from foreign direct investment? Empirical evidence from Indonesian manufacturing Suyanto Salim, Ruhul Bloch, Harry Foreign direct investment Technical efficiency Spillover effects Indonesia Stochastic production frontier Despite growing concern regarding the productivity benefits of foreign direct investment (FDI), very few studies have been conducted on the impact of FDI on firm-level technical efficiency. This study helps fill this gap by empirically examining the spillover effects of FDI on the technical efficiency of Indonesian manufacturing firms. A panel data stochastic production frontier (SPF) method is applied to 3318 firms surveyed over the period 1988–2000. The results reveal evidence of positive FDI spillovers on technical efficiency. Interesting differences emerge however when the samples are divided into two efficiency levels. High-efficiency domestic firms receive negative spillovers, in general, while low-efficiency firms gain positive spillovers. These findings justify the hypothesis of efficiency gaps, that the larger is the efficiency gap between domestic and foreign firms the easier the former extracts spillover benefits from the latter. 2014 Journal Article http://hdl.handle.net/20.500.11937/43667 10.1016/j.asieco.2014.05.003 Elsevier fulltext |
| spellingShingle | Foreign direct investment Technical efficiency Spillover effects Indonesia Stochastic production frontier Suyanto Salim, Ruhul Bloch, Harry Which firms benefit from foreign direct investment? Empirical evidence from Indonesian manufacturing |
| title | Which firms benefit from foreign direct investment? Empirical evidence from Indonesian manufacturing |
| title_full | Which firms benefit from foreign direct investment? Empirical evidence from Indonesian manufacturing |
| title_fullStr | Which firms benefit from foreign direct investment? Empirical evidence from Indonesian manufacturing |
| title_full_unstemmed | Which firms benefit from foreign direct investment? Empirical evidence from Indonesian manufacturing |
| title_short | Which firms benefit from foreign direct investment? Empirical evidence from Indonesian manufacturing |
| title_sort | which firms benefit from foreign direct investment? empirical evidence from indonesian manufacturing |
| topic | Foreign direct investment Technical efficiency Spillover effects Indonesia Stochastic production frontier |
| url | http://hdl.handle.net/20.500.11937/43667 |