Fredrik Sjöholm

Exports, Imports and Productivity: Results from Indonesian Establishment Data

Using detailed micro data from the Indonesian manufacturing sector, we examine whether participation in international trade affects establishments productivity. Establishments participating in exports or imports have relatively high levels of productivity. Furthermore, the results suggest that establishments engaged in exports have shown comparable high productivity growth. The larger the share of an establishments output that is exported the higher its productivity growth. The results concerning the effect of imports on productivity growth are mixed.

FDI and Wage Spillovers in Indonesian Manufacturing

This paper examines the effect of foreign direct investment in Indonesian manufacturing on wages in locally owned Indonesian manufacturing plants. The issue is examined in a cross section of Indonesian manufacturing industries and provinces in one of the few years for which data on worker characteristics were available. Wages in locally owned plants were high in industries and industries within provinces with large foreign presence. Since the foreign plants also pay higher wages than locally owned ones, the two factors together imply that higher foreign presence raises the general wage level in a province and industry. JEL no. F2, J3

Trade Liberalization and the Geography of Production: Agglomeration, Concentration, and Dispersal in Indonesia's Manufacturing Industry

Abstract The effect of the liberalization of trade on the spatial concentration of economic activities is not straightforward. It has been widely argued that protectionism increases spatial concentration as firms locate close to the main domestic markets. However, it has also been argued that an expansion of international trade primarily favors existing industrial centers and therefore leads to increased regional inequalities. Against the background of ongoing debates in both mainstream economics and in geography, we examine the spatial concentration of manufacturing in Indonesia between 1980 and 1996, a period when Indonesia substantially liberalized its trade regime. The high concentration did not decrease during this period, and establishments that engaged in international trade were actually comparably concentrated. We discuss some possible explanations for the spatial concentration in Indonesia and conclude that a host of factors may affect the outcome of trade liberalizations. In particular, the spatial configuration of the national settlement system is a potentially important factor in this regard.

FDI and the Dynamics of Productivity in Indonesian Manufacturing

This article examines productivity growth in the Indonesian manufacturing sector. We use a longitudinal data set to calculate the effects on aggregate manufacturing productivity growth from improvements within establishments, from reallocation of market shares, and from the turnover of plants. Productivity growth is mainly explained by reallocation of market shares and from turnover of plants. Moreover, the foreign contribution to productivity growth is unclear and depends on the choice of productivity measure. A cautious conclusion is that the foreign contribution is about the same size as the foreign share of manufacturing output. Finally, there is a difference in the causes of productivity growth between foreign and domestic plants.

Foreign Firms and Chinese Employment

This paper examines the effect of foreign direct investment (FDI) on employment in the Chinese manufacturing sector. As one of the worlds largest recipients of FDI, China has arguably benefited from foreign multinational enterprises in various respects. However, one of the main challenges for China, and other developing countries, is job creation, and the effect of FDI on employment is uncertain. The effect depends on the amount of jobs created within foreign firms as well as the effect of FDI on employment in domestic firms. We analyse FDI and employment in China using a large sample of manufacturing firms for the period 1998–2004. Our results show that FDI has positive effects on employment growth. The relatively high employment growth in foreign firms is associated with their firm characteristics and their high survival rate. Employment growth is also relatively high in private domestic Chinese firms. There also seems to be a positive indirect effect of FDI on employment in private domestically-owned firms, presumably caused by spillovers.

South–South FDI and Development in East Asia

This paper attempts to measure the size of South–South foreign direct investment (FDI) in developing East Asia and the trends in it, the characteristics of the investing countries, and the investments themselves. It also summarizes the findings of studies in individual countries of the effects of these investments. The studies of individual countries will be used to try to find some consensus on differences between South–South FDI and North–South FDI. Among the comparisons of the two types of FDI summarized are findings about their industrial composition; their effects on their host countries and their host-country firms’ productivity, wages, and employment; and how these differ across industries.

Who Do You Trust? Ethnicity And Trust In Bosnia And Herzegovina

Abstract This article examines the question of trust in Bosnia and Herzegovina with a special focus on the role of ethnicity. We find generalised trust to be low and declining in Bosnia and Herzegovina. Moreover, generalised trust is negatively affected by the degree of ethnic heterogeneity in the region. However, a further examination of trust reveals a more complex relationship between ethnicity and trust: people tend to show low levels of trust in all other people irrespective of their ethnic belongings. We argue that ethnic distribution might capture some other regional specific characteristics that also affect the level of trust.

Multinationals, cross-border acquisitions and wage dispersion

We examine the impact of cross-border acquisitions on intra-firm wage dispersion using a detailed Swedish linked employer-employee data set including data on all firms and about 50% of the Swedish labour force with information on job-tasks and education. Foreign acquisitions of domestic multinationals and local firms increase wage dispersion but so do also other types of cross-border acquisitions. Hence, it is the acquisition itself rather than foreign ownership that increases wage dispersion. The positive wage effect is concentrated to CEOs and other managers, whereas other groups are either negatively affected or not affected at all.

Foreign direct investment and growth in East Asia: lessons for Indonesia

Abstract Foreign direct investment (FDI) has been important in the growth and global integration of developing economies. Both Northeast and Southeast Asia, especially the latter, have been part of this development, with increasing inflows of FDI and greater foreign participation in local economies. However, Indonesia has been an outlier within the region. Inflows of FDI have been lower to Indonesia than to other countries, especially in manufacturing, and they have been lower than could be expected from Indonesias size, population and other country characteristics. We show that the inflows that have occurred have benefited Indonesia, and use the East Asian experience to identify measures that are likely to increase these flows. A relatively poor business environment, inefficient government institutions, low levels of education and poor infrastructure all seem to be important explanations for the low inflows of FDI to Indonesia.

The Internationalization of Vietnamese Small and Medium-Sized Enterprises

Small and medium-sized enterprises (SMEs) have been important for Vietnams rapid economic development. This paper investigates the ways in which Vietnams SMEs have been affected by the ongoing internationalization of the Vietnamese economy and points out the challenges that lie ahead if the countrys plans for further trade liberalization are realized. The basis of our analysis is a unique database on the activities of a large sample of Vietnamese SMEs during 1990, 1996, and 2002, with quantitative data about company operations, as well as qualitative information about the entrepreneurs perceptions of the current business environment and their expectations about the future.