Globalization and Innovation in Indonesia: Evidence from Micro-Data on Medium and Large Manufacturing Establishments

  • Abstract   In this paper we examine the impact of globalization on innovation in the Indonesian manufacturing sector. The lack of innovation data in the manufacturing survey has necessitated the use of R&D expenditure as an input in the innovation production function. Globalization is represented by being exporters, FDI and effective rate of protection (EPR). The model is set up such as within the concept of R&D as conditional input demand function, allowing labor productivity to have impact on R&D. In this case we find that less productive firms are less likely to venture into R&D activities. In terms of globalization variables we find that being exporters is important determinant of R&D. Meanwhile the impact of FDI firms on domestic R&D is only on the incidence not on the intensity of R&D. It will require a critical mass of firms within a location or an agglomeration to have a meaningful impact. Also lower ERP would induce firms to spend more on R&D. So lowering protection or trade barriers will have positive impact on R&D.For full article, click the following link: http://www.eria.org/ERIA-DP-2012-09.pdf Hits: 2…
    21 Feb
    21 Feb
  • Abstract The CIT reform enacted by Law No.36 of 2008 cuts maximum tax rates from 30 per cent to 25 per cent and offers some incentives for business in Indonesia. This study aims at measuring the impacts of 2008 CIT reform on tax revenue and poverty. The 2008 CIT reform supported with the administrative reforms and the 2008 tax amnesty policy has increased new corporate tax payers by 422,407 and tax revenue by 53.95 per cent during 2009 to 2011. Further, the simulation result of CGE-Microsimulation shows that cutting the CIT rate from 30 per cent to 25 per cent will attract IDR 41.77 trillion of new investments, create 441,910 new job opportunities, boost 1.46 per cent of economic growth, decline 1 per cent of consumer price index, and raise averagely 1.5 per cent of wage rates. These macroeconomic changes contribute significantly to lift 1.88 million people (0.898 per cent) out of poverty.   Hits: 4…
    20 Feb
    20 Feb
  • AbstractThe recent financial crisis has spread to the rest of the world. The impact of the financial crisis on economic activity varies widely across countries, reflecting differences in vulnerability to financial crisis, heterogeneity in macroeconomic structures, and differences in policy responses. This dissertation finds that the impact of the current financial crisis on output and unemployment is related to the flexibility of the labor market. Countries with low hiring cost suffered lower output and employment losses due to the recent financial crisis. With respect to central bank independence, financial crises significantly increase the likelihood that a central bank governor will be replaced. This dissertation also finds that the legal and actual independence of Bank Indonesia diverged substantially before it was mandated as an independent institution. Finally, fiscal deficits and debt crises have a positive, significant and homogenous effect on inflation in the long run.For full article, click the following link : http://irs.ub.rug.nl/ppn/345606892 Hits: 4…
    20 Feb
    20 Feb
  • AbstractThe impact of the global financial crisis varies across countries. We examine whether cross-country differences in output loss and speed of recovery are affected by differences in labor market flexibility. By employing cross-country regressions and including control variables like trade and capital market integration, fiscal balance, financial vulnerability, and institutional differences, we find that lower hiring costs reduce the output loss, notably so in high-income countries. However, the duration of the crisis is longer in case of low dismissal costs, notably so in low-income countries. Hits: 0…
    20 Feb
    20 Feb
  • PENDAHULUAN   Pengalaman selama lebih dari lima puluh tahun kemerdekaan Indonesia menunjukkan bahwa angan-angan Bung Hatta untuk menjadikan koperasi ini motor pertumbuhan ekonomi masih jauh dari kenyataan.  Bahkan koperasi lebih sering menjadi obyek skandal daripada fungsinya membantu anggotanya. Beberapa pengamat menganggap bahwa penyebab dari kegagalan koperasi tersebut adalah adanya penyimpangan dalam pelaksanaan prinsip koperasi seperti core business yang tidak jelas, terdominasinya hak anggota oleh pengurus.  Sadli (1962) berpendapat kegagalan koperasi dalam awal periode Soekarno karena koperasi kalah bersaing dibandingkan dengan BUMN.  Jadi negara (BUMN) yang tidak memberikan kesempatan koperasi untuk berkembang.  Berkaitan dengan hal ini, Sadli mencontohkan pada cabang-cabang kegiatan dimana BUMN tidak eksis, koperasi dapat berkembang dengan pesat. Hits: 0…
    06 Sep
    06 Sep
  •   PREFACE The purpose of this paper is to investigate and elucidate the pattern of manufacturing protection in Indonesia and to distinguish a pattern of protection in crony versus non-crony sectors. The results are quite satisfactory and generally consistent with the hypothesis. The econometric results provide evidence that the role of crony capitalist and interest groups were increasingly important in influencing trade policy in 1987 and 1995. In the light of the G-H model (both the standard and the extended G-H model), the results support the hypothesis that crony capitalist will manage to form a lobby to gain rent from protection. The important question to emerge from these results in how trade liberalisation could take place when the role of crony capitalist was growing ever stronger in Indonesia. This study argues there is evidence that crony capitalist became involved in some exportables sectors in the 1990’s and concentrated in the non-tradable services, trade and natural resources sectors where classic rent seeking behaviour predominated. Jakarta, September 23th 2003   Muhammad Chatib Basri Hits: 0…
    06 Sep
    06 Sep
  • Abstract In the 1970, Lakshmanan was involved in development of a set of complex interregional model for the US economy. In this paper, we draw attention to some of the important characteristic of the spatial pattern of exchange characterizing of economies, expanding and elaborating upon the initial formulation embodied in the notion of a field of influence of change. In particular, attention is drawn to the nature of internal (to the region) and external sources of change and their impacts; these formulations are interpreted through an hierarchical inclusion process that examines the nature and strength of the implicit network properties inherent in the exchange of good and services over space. The focus of attention will be on the micro-level of economic subsystems; application is made to the interregional economies of Indonesia to explore commonalties and differences in the nature of the spatial exchange across five macro regions. Michael Sonis Geoffrey J.D. Hewings Nuzul Achjar Hits: 0…
    06 Sep
    06 Sep
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