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Jurnal Ekonomi Malaysia

55 (2) 2021 91 – 105

The Impacts of Foreign Direct Investment and Export Expansion on the Performance of the High-Tech Manufacturing Industry

Airlangga University
Jl. Airlangga No 4-6, Surabaya
East Java 60286
INDONESIA.

dyah-wulansari@feb.unair.ac.id

Airlangga University
Jl. Airlangga No 4-6, Surabaya
East Java 60286
INDONESIA.

wenny.restikasari-2018@feb.unair.ac.id

Airlangga University
Jl. Airlangga No 4-6, Surabaya
East Java 60286
INDONESIA.

shochrul-r-a@feb.unair.ac.id

Airlangga University
Jl. Airlangga No 4-6, Surabaya
East Java 60286
INDONESIA.

haura.islamia@gmail.com

Malikussaleh University
Jl. Kampus Unimal, Bukit Indah, Blang Pulo
Muara Dua, Aceh Utara, Aceh, 24355
INDONESIA

darmawati@unimal.ac.id

Abstract

This study investigates the impact of foreign direct investment and export expansion on firm performance. Using firm-level data from the Indonesian high-tech manufacturing industry, we employ stochastic frontier analysis to determine firm efficiency. Our study provides evidence of negative backward and positive forward FDI spillovers on firms’ efficiency level. The results further show that foreign firms in the high-tech manufacturing industry are more efficient than local firms. Furthermore, a greater degree of fragmented trade integration is related to better performance among firm in the high-tech manufacturing industry. This indicates the significance of the production of component goods relative to the finished goods. In terms of the policy, the authority might need to consider whether the existence of FDI benefits local producers beyond promoting trading of component goods of the high-tech manufacturing industry.

Keywords

export expansion; Foreign direct investment; high-tech manufacturing industry; Stochastic frontier analysis

JEL Codes

F14, F64, L63
http://dx.doi.org/10.17576/JEM-2021-5502-8
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Bibliography

Export Bibliography

Sari, , Restikasari, , Ajija, , Tarbiyah Islamia, , & Muchtar, (2021). The Impacts of Foreign Direct Investment and Export Expansion on the Performance of the High-Tech Manufacturing Industry. Jurnal Ekonomi Malaysia, 55(2), 91–105. http://dx.doi.org/10.17576/JEM-2021-5502-8

@article{,
  title={The Impacts of Foreign Direct Investment and Export Expansion on the Performance of the High-Tech Manufacturing Industry},
  author={Sari, Dyah Wulan and Restikasari, Wenny and Ajija, Shochrul Rohmatul and Tarbiyah Islamia, Haura Azzara and Muchtar, Darmawati},
  journal={Jurnal Ekonomi Malaysia},
  volume={55},
  number={2},
  pages={91—105},
 

year={2021},
}

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