Discussion Papers

Host-site Support, Foreign Ownership, Regional Linkages and Technological Capabilities: Evidence from Automotive Firms in Indonesia

By Rajah Rasiah, Rafat Beigpoor Shahrivar, Abdusy Syakur Amin

ERIA Discussion Paper 2015-08

Posted: February 2015


This study analyses the influence of host-site institutional support, foreign ownership and regional production linkages on firm-level technological capabilities using data from automotive firms in Indonesia. The results show that host-site institutional support and foreign ownership are positively correlated with technological capabilities. In addition, regional linkages show a significant and positive link on technological capabilities. However, regional linkages and foreign ownership explain more strongly technological capabilities than host-site institutional support in automotive firms in Indonesia. This evidence suggests that the supporting high tech environment require further strengthening to stimulate higher technological capabilities in the automotive industry in Indonesia.


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