FDI Spillover Effects on Productivity Varying from the Size of Firm and Industries in Indonesia

Kyosuke Kurita

School of Economics, Kwansei Gakuin University,
Hyogo, Japan
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Misaki Monzen

Graduate School of International Cooperation Studies,
Hyogo, Japan
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Khoirunur Rofik

Department of Economics, University of Indonesia,
Jakarta, Indonesia
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Abstract

The purpose of this short paper is to show the difference of spillover effect according to the firm size using Indonesian manufacturing micro datasets spanning 13 years from 2002 to 2014. From our estimation results, it found that the spillover effects vary depending on the size of firms and industries. Negative effects from foreign direct investment (FDI) on firm productivity are larger on small and medium enterprises (SMEs) than on large enterprises (LEs). On the other hands, LEs in high-value added industries received positive spillover effect.

Keywords: Indonesia, spillover, foreign direct investment (FDI), small and medium enterprises (SMEs).
JEL Codes: D22, F21, O53.

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