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Import Penetration, Export Orientation, and Plant Size in Indonesian Manufacturing

Import Penetration, Export Orientation, and Plant Size in Indonesian Manufacturing
Date:
7 July 2014
Authors:
Sadayuki Takii
Tags:
industry and manufacturing, Trade

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This paper empirically examines differential impacts of globalisation on plant size among plants with different characteristics, including initial plant size, import and export status, and ownership. After accounting for other characteristics, results of this analysis suggest that both import penetration and export orientation do not have differential impacts on the size of larger and smaller plants. This is contrary to fears that only relatively large plants can benefit from globalisation while smaller plants would lose their market shares. The results also suggest that negative impact of import penetration on plant size is greater for importers and that the increase in export orientation positively impacts the size of exporting plants.

ERIA-DP-2014-17

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