1. Trade Integration, FDI, and Productivity
- Author
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Javorcik, Beata, Iacovone, Leonardo, and Fitrani, Fitria
- Subjects
TRADE LIBERALIZATION ,INFORMATION PROVISION ,INFORMATION ,INVESTMENT ,IMAGE ,FOREIGN TECHNOLOGY ,RENT SEEKING ,FOREIGN INVESTORS ,INFRASTRUCTURE ,RIGHTS ,ECONOMIC GROWTH ,FOREIGN ACQUISITIONS ,DRIVERS ,EXTERNALITIES ,EMPLOYMENT ,COMPUTERS ,INCOME ,FOREIGN PARENT COMPANY ,PRODUCTIVITY ,LABOR PRODUCTIVITY ,FOREIGN ENTRY ,MANUFACTURING SECTOR ,INVESTMENT PROMOTION ,COMPETITIVENESS ,GOVERNMENTS ,INCENTIVES ,IMPORT TARIFFS ,BUSINESS ,TECHNOLOGICAL SOPHISTICATION ,AUDITING ,FOREIGN PRODUCERS ,BANK ,GOODS ,TECHNOLOGIES ,RENT ,USERS ,STRATEGIES ,AVERAGE PRODUCTIVITY ,FOREIGN DIRECT INVESTMENT ,DOMESTIC FIRMS ,INDUSTRY ,WAGES ,SEARCH ,GLOBAL ECONOMY ,VALUE CHAIN ,INTANGIBLE ASSETS ,WELFARE ,PRODUCTION ,MANUFACTURING SECTORS ,PRODUCT DESIGN ,TOTAL OUTPUT ,LIQUIDITY ,SERVICES ,PERFORMANCE ,COPYRIGHT ,RISKS ,TRADE ,FAX ,SUPPLY ,IPA ,INDUSTRY PRODUCTIVITY ,INVESTMENT PROMOTION AGENCY ,INVESTMENT REGIME ,ADVERSE IMPACT ,BUSINESS REGISTRATION ,PROPERTY ,MANUFACTURING INDUSTRIES ,MARKETING ,RD ,ECONOMIC DEVELOPMENT ,CRISES ,DATA ,INNOVATION ,PRODUCTIVITY GROWTH ,CONSUMERS ,PRODUCTION PROCESS ,VARIABLES ,HOST COUNTRIES ,MANUFACTURING ,IPAS ,CUSTOMERS ,CUSTOMER SERVICE ,PRODUCT INNOVATION ,ACCOUNTING ,INTERNATIONAL ECONOMICS ,RESULT ,VALUE ,EXPORTS ,DEMONSTRATION EFFECTS ,GOVERNANCE ,USER ,MANUFACTURING FIRMS ,HOST COUNTRY ,SUPPLIERS ,TARGET ,BUSINESS PLAN ,EQUIPMENT ,EFFECTS ,TELECOMMUNICATIONS ,MANUFACTURING INDUSTRY ,EQUITY ,TIME PERIOD ,TRAINING ,DIRECT INVESTMENT ,FDI ,MATERIALS ,COMPETITION ,SKILLED LABOR ,FOREIGN ACQUISITION ,CREDIT ,TECHNOLOGY TRANSFER ,BUYER ,TARGETS ,MARKET SHARE ,MANAGEMENT ,TECHNOLOGY ,FOREIGN OWNERSHIP ,LABOR ,EXPECTATIONS ,PROSPECTIVE CUSTOMERS ,CUSTOMER ,ECONOMICS ,INTEREST ,RESULTS ,JOB CREATION ,INPUTS ,LABOR FORCE ,TRANSPORT ,TOTAL FACTOR PRODUCTIVITY ,VALUE CHAINS ,MARKET SHARES ,CONSUMER GOODS ,LINK ,NEW TECHNOLOGIES ,BENCHMARKING ,INVESTMENT PROMOTION AGENCIES - Abstract
Policy attitude towards trade integration and foreign direct investment (FDI) is often a controversial yet popular subject. This note presents evidences from recent policy researches that arguing that engaging in an open trade and investment regime have brought productivity gains which is key factor for sustaining increase in income per-capita. Evidence from Indonesia also suggests that foreign owned plants have become increasingly important, generating a significant share of exports and overall output, as well as more productive and more export intensive than domestic plants, and to spend more on RD and training. FDI also have positive impact on firms in the same sector, through competition and demonstration effects, and in upstream sectors, as suppliers to foreign-owned plants improve the quality of their own products to meet their clients more exacting needs. Evidence also suggests a positive impact from import competition in improving allocative efficiency across manufacturing plants which is a key element in driving productivity in manufacturing sector.
- Published
- 2015