INDUSTRIAL ESTATE, FIRMS’ PRODUCTIVITY, AND INTERNATIONAL TRADE RELATIONSHIP: THE CASE OF INDONESIAN MANUFACTURING FIRMS

  • Fitria Faradila
  • Makoto Kakinaka Hiroshima University
DOI: https://doi.org/10.30908/bilp.v14i1.426
Abstract Views: 37 | PDF Downloads: 22

Downloads

Download data is not yet available.
  
Keywords: Industrial Estate, Productivity, Export, Matching Methods, Entropy Balancing, Kawasan Industri, Produktivitas, Ekspor

Abstract

Abstrak

Kawasan industri diyakini dapat mendukung perkembangan sektor industri di negara berkembang melalui fasilitas infrastruktur yang lebih baik, akses ke industri pendukung serta limpahan teknologi dan informasi. Ketiga faktor tersebut diperkirakan dapat mendorong produktivitas dan aktivitas ekspor perusahaan manufaktur di dalam kawasan industri. Berbagai penelitian terdahulu masih memberikan hasil yang beragam mengenai hubungan ketiga variabel ini. Oleh karena itu, penelitian ini bertujuan untuk mengidentifikasi hubungan antara kawasan industri dengan tingkat produktivitas dan kegiatan ekspor pada studi kasus perusahaan manufaktur di Indonesia. Penelitian ini memperkenalkan penggunaan dari entropy balancing, salah satu teknik matching methods dengan unit analisis level data perusahaan. Perbedaan jumlah observasi yang cukup signifikan antara perusahaan di dalam dan di luar kawasan industri memotivasi penggunaan teknik matching methods agar data penelitian menjadi seimbang. Treatment (perlakuan) dari penelitian ini adalah ketika perusahaan berada di kawasan industri. Terdapat dua variabel keluaran yakni tingkat produktivitas dan aktivitas ekspor. Hasil penelitian menunjukkan bahwa berada di Kawasan Industri mendorong tingkat produktivitas, namun gagal untuk mempromosikan kegiatan ekspor.

 

Abstract

Many believe that the industrial estate could encourage the industrial sector in developing countries due to its better infrastructure, access to supporting industries, and the market as well as technology and information spillover. These factors could lead to a higher productivity level and export activities of manufacturing firms inside the industrial estate. Some previous studies still provide a mixed result regarding the relationship between these three variables. Thus, this paper contributes to the related study by examining the relationship between an industrial estate and both productivity level and export activity in the case of Indonesian Manufacturing Firms. The paper introduces the practice of entropy balancing, one of matching methods along with firm-level data as a unit of analysis. A significant difference in the number of observations between firms inside and outside the industrial estate motivates the usage of matching methods technique, so the data become balanced. The treatment is when the firms being in the industrial estate. There are two outcomes variables, which are productivity level and export activity. The result found that being industrial estate improves firms’ productivity, yet it fails to promote export activity.

JEL Classification: L23, L52, L60

Author Biography

Makoto Kakinaka, Hiroshima University

Graduate School for International Development and Cooperation

References

Abadie, A. & Cattaneo, M. D. (2018). Econometrics Methods for Program Evaluation. The Annual Review of Economics 10:465-503.

Anam, A. K. & Setyawan, M. (2019). Strategi Pengembangan Produk Unggulan Daerah Berbasis Klaster pada Sentra Kawasan Industri Rotan di Kabupaten Jepara. Management Development and Applied Research Journal 1(2): 1-8.

Atthahara, H. & Rizki, M. F. (2019). Analisis tentang Rencana Tata Ruang Wilayah dan Dampak Kebijakan Pengembangan Kawasan Industri bagi Masyarakat Sekitar di Kabupaten Karawang. The Indonesian Journal of Politics and Policy 1(1): 9-21.

Amiti, M. & Konings, J. (2007). Trade Liberalization, Intermediate Inputs and Productivity: Evidence from Indonesia. American Economic Review 97(5):1611-1638.

Bas, M. & Strauss-Kahn, V. (2015). Input-trade Liberalization, Export Prices and Quality Upgrading. Journal of International Economics 95:250-262.

Beveren, I. V. (2012). Total Factor Productivity Estimation: A Practical Review. Journal of Economic Survey 22(1):98-128.

Cirera, X., Lakshman, R. W. D. (2017). The Impact of Export Processing Zones on Employment, Wages and Labour Conditions in Developing Countries. Journal of Development Effectiveness, 9(3).

CSIS. (2015). Kawasan Ekonomi Khusus dan Strategi di Indonesia: Tinjauan atas Peluang dan Permasalahan. Retrieve on 28 November 2019 from https://www.csis.or.id/

Daddi, T., Iraldo, F., Frey, M., Gallo, P., Gianfrate, V. (2015). Regional policies and eco-industrial development: the voluntary environmental certification scheme of the eco-industrial parks in Tuscany (Italy). Journal of Cleaner Production, 1-9.

Ditkaew, K. & Pitchayatheeranart, L. (2019). Using Structure Equation Model for Evaluating the Impact of Activity Based Costing towards Strategic Management Innovation and Performance of Firms in Industrial Estate Authority of Thailand. Asian Administration and Management Review 2(1):110-121.

Djulius, H. (2017). Foreign Direct Investment and Technology Transfer: Knowledge Spillover in the Manufacturing Sector in Indonesia. Global Business Review 18(1):57-70.

Elliot, M. & Watson, S. K. (2015). Entropy Balancing: A Maximum-entropy Reweighting Scheme to Adjust for Coverage Error. Quality & Quantity 22(4):1781-1797.

Fan, H., Li, Y. A., Yeaple, S. R. (2015). Trade Liberalization, Quality and Export Prices. The Review of Economics and Statistics, Vol. 97(5): 1033-1051.

Giannecchini, P., Taylor, I. (2017). The Eastern Industrial Zone in Ethiopia: Catalyst for Development?. Geoforum, 88: 28-35.

Gokan, T., Kuroiwa, I., Nakajima, K. (2019). Agglomeration economies in Vietnam: A firm-level analysis. Journal of Asian Economics 62: 52-64.

Goshu, Y. Y., Kitaw, D., Matebu, A. (2017). Development of Productivity Measurement and Analysis Framework for Manufacturing Companies. Journal of Optimization in Industrial Engineering 22: 1-13.

Hainmuller, J. (2011). Entropy Balancing for Causal Effects: A Multivariate Reweighting Method to Produce Balanced Samples in Observational Studies. Political Analysis 20: 25-46.

Hainmuller, J. & Xu, Y. (2013). Ebalance: A Stata Package for Entropy Balancing. Journal of Statistical Software 54(7).

Hashino, T. & Otsuka, K. (2013). Cluster-based Industrial Development in Contemporary Developing Countries and Modern Japanese Economic History. Journal of The Japanese and International Economies 30: 19-32.

Hassink, R., Hu, X., Shin, D., Yamamura, S., Gong, H. (2018). The Restucturing of Old Industrial Areas in East Asia. Area Development and Policy 3(2): 185-202.

King, G., Lucas, C., Nielsen, R. A. (2016). The Balance-Sample Size Frontier in Matching Methods for Causal Inference. American Journal of Political Science 61(2): 473-489.

Le, V. A. (2018). Does Agglomeration Account for Process Innovation in Vietnamese Small and Medium Enterprises?. Economics Honors Projects 83.

Lee, S. J., Lin, G. T. R., His, P. H. (2017). Industrial Cluster Development and Its Contribution to Economic Growth in Taiwan – Hsinchu Science and Industrial Park (HSIP). Journal of Scientific & Industrial Research 76: 273:278.

Levinsohn, J. & Petrin, A. (2003). Estimating Production Function using Inputs to Control for Unobservables. Review of Economic Studies 70: 317-341.

Lu, Y., Tao, Z., Zhu, L. (2017). Identifying FDI spillover. Journal of International Economics, 107: 75-90.

Moberg, L. (2018). The Political Economy of Special Economic Zones: Lesson for the United States. Chapman Law Review 21(2).

Napitupulu, B. K. & Nugroho, P. (2016). Pengaruh Aktivitas Industri terhadap Peningkatan Ekonomi Penduduk dan Perkembangan Perdagangan dan Jasa di Kota Batam. Teknik Perencanaan Wilayah Kota 5(1): 1-9.

Nazarczuk, J. M. (2017). Do operations in SEZs improve a firm’s productivity? Evidence from Poland. New Trends and Issues Proceedings on Humanities and Social Sciences 4(10): 256–264.

Nazarczuk, J. M. & Uminski, S. (2018a). The geography of openness to foreign trade in Poland: The role of special economic zones and foreign-owned entities. Bulletin of Geography. Socio-economic Series, 39(39): 97-111.

Nazarczuk, J. M. & Uminski, S. (2018b). The Impact of Special Economic Zones on Export Behaviour: Evidence from Polish Firm-level Data. Ekonomie Vol. 21(3): 4-22.

Neuenkirch, M., Neumeier, F. (2016). The impact of US sanction on Poverty. Journal of Development Economics 121: 110-119.

Petrin, A., Poi, B. P., Levinsohn, J. (2004). Production Function Estimation in Stata using Inputs to Control for Unobservables. The Stata Journal 4(2): 113-123.

Puig, F., Madhok, A., Shen, Z. (2019). Investigating Firm Heterogeneity in Country-of-origin Cluster Location Choice Decisions. Multinational Business Review.

Ryzhenkov, M. (2016). Resource Misallocation and Manufacturing Productivity: The Case of Ukraine. Journal of Comparative Economics 44: 41-55.

Sabri, M., Nachrowi, D. N., Soetjipto, W., Panennungi, M. A. (2018). Industrial Estate and Export Decision of Manufacturing Firms in Indonesia. Malaysian Journal of Economic Studies 55(2): 189-207.

Santipolvut, S. & Mali, K. (2015). Industrial Cluster Development in Thailand: There is still a Long Road Ahead. Journal of Applied Economic Sciences 8(38): 1259-1287.

Thanh, N. T., Lebailly, P., Dien, N. T. (2018). Migrant Workers for the Development of Industrial Zones in Bac Ninh Province, Vietnam. Asian Social Science 14(12): 115-123.

Thum, A. E. & Raciborski, R. (2017). Determinants of Trend TFP Growth and Key Policies that Influence It. Quarterly Report on The Euro Area 16(2): 31-41.

Turkina, E. & Assche, A. V. (2018). Global Connectedness and Local Innovation in Industrial Clusters. Journal of International Business Studies 49: 706-728.

Turner, M., Sermcheep, S., Anantasirijikat, S., Srisangnam, P. (2016). Small and medium-sized enterprises in Thailand: government policy and economic development. Asia Pacific Journal of Public Administration 38(4): 251-269.

United Nations Industrial Development Organization. (2012). Conference Report on Europe and Central Asia Regional Conference on Industrial Parks: as a tool to foster local industrial development, Baku, Azerbaijan, April 17-18, 2012. UNIDO press.

Winardi., Priyarsono, D. S., Siregar, H., Kustanto, H. (2017). Kinerja Sektor Industri Manufaktur Provinsi Jawa Barat Berdasarkan Lokasi di Dalam dan di Luar Kawasan Industri. Jurnal Manajemen Teknologi 16(3): 241-257.

Winardi., Priyarsono, D. S., Siregar, H., Kustanto, H. (2019). Peranan Kawasan Industri dalam Mengatasi Gejala Deindustrialisasi. Jurnal Ekonomi dan Pembangunan Indonesia, 19(1): 84-95.

Zhan, J. & Narula, R. (2019). Using Special Economic Zones to Facilitate Development: Policy Implications. Transnational Corporations 26(2): 1-25.

Zhao, Q. & Percival, D. (2016). Entropy Balancing is Doubly Robust. Journal of Causal Inference 5(1).

Published
2020-07-15
How to Cite
Faradila, F., & Kakinaka, M. (2020). INDUSTRIAL ESTATE, FIRMS’ PRODUCTIVITY, AND INTERNATIONAL TRADE RELATIONSHIP: THE CASE OF INDONESIAN MANUFACTURING FIRMS. Buletin Ilmiah Litbang Perdagangan, 14(1), 121-146. https://doi.org/10.30908/bilp.v14i1.426
Section
Articles