Do local suppliers and local buyers benefit from foreign direct investment?: evidence from Indonesia

DOI

10.2991/insyma-18.2018.54How to use a DOI?

Keywords

Foreign direct investment, Local buyers, Local suppliers, manufacturing industries, Indonesia

Abstract

This study examines the impact of foreign direct investment on the local suppliers as well as on the local buyers in Indonesian manufacturing industries. The effect of FDI on local suppliers is tracked down using the backward effect on the efficiency performance and the effect on local buyers is evaluated through the forward effect on the technical efficiency. Stochastic Frontier Method is applied as the method of estimation on 3,318 firms for 13 year period (total 43,134 observations). The panel data are constructed using the survey of large and medium firms conducted by Indonesian Central Board of Statistik (BPS). The results show that the existence of foreign firms in Indonesian manufacturing sector reduce inefficiency of not only local firms in the same industries but also local suppliers and local buyers.

Copyright

© 2018, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Dr. Suyanto
AU  - Yenny Sugiarti
PY  - 2018/03
DA  - 2018/03
TI  - Do local suppliers and local buyers benefit from foreign direct investment?: evidence from Indonesia
BT  - Proceedings of the 15th International Symposium on Management (INSYMA 2018)
PB  - Atlantis Press
SP  - 220
EP  - 223
SN  - 2352-5398
UR  - https://doi.org/10.2991/insyma-18.2018.54
DO  - 10.2991/insyma-18.2018.54
ID  - Suyanto2018/03
ER  -