Indonesian Firms in Facing Globalization: Do Foreign Ownership and Export Matter?

DOI

10.2991/aebmr.k.200127.001How to use a DOI?

Keywords

globalization, outward-looking strategy, foreign ownership, export, import, productivity

Abstract

The Indonesian firms need to prepare and be ready for the globalization and the industrial revolution 4.0. The inward-looking strategy is no longer sufficient to face competition, while the outward-looking strategy provides a significant benefit for the firms to survive and compete. In response to this globalization issue, the current study evaluated the outward-looking strategy by examining three critical external factors, besides inward-looking factors that contribute to Indonesian firms’ productivity. The outward-looking factors were foreign ownership, export, and import, whereas the inward-looking factors were material, labor, capital, and energy. Applying the augmented Cobb-Douglas production function on 8,589 manufacturing firms within seven years period, the findings of this current study showed the importance of foreign ownership, export, and import in significantly influencing the productivity of the Indonesian firms. The results were robust under four methods of analyses, namely Ordinary Least Squared (OLS), Generalized Least Squared (GLS), Maximum Likelihood (ML), and General Method of Moments (GMM). The findings suggested the outward-looking strategy for Indonesian firms to increase their productivity.

Copyright

© 2020, 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  - S. Suyanto
AU  - Y. Sugiarti
PY  - 2020
DA  - 2020/01/31
TI  - Indonesian Firms in Facing Globalization: Do Foreign Ownership and Export Matter?
BT  - Proceedings of the 17 th International Symposium on Management (INSYMA 2020)
PB  - Atlantis Press
SP  - 1
EP  - 5
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200127.001
DO  - 10.2991/aebmr.k.200127.001
ID  - Suyanto2020
ER  -