•  
  •  
 
Jurnal Kebijakan Ekonomi

Abstract

This study analyzes the influence of the level of company ownership and also analyzes further about evaluating the requirements of foreign capital ownership as a Negative Investment List (NIL). This study uses a panel of Indonesian manufacturing companies 2007-2014 with the estimated GMM method of Arellano-Bond. The estimation results show an increase achieved with foreign ownership, but after reaching a certain point the increase or increase as intended inverted U. Required to achieve optimal needs. Then further analysis showed that NIL Regulations were approved by foreign capital ownership, NIL companies' foreign capital ownership was lower than Non-NIL companies, but the increase in NIL companies on average was lower.

Bahasa Abstract

Studi ini bertujuan menganalisa pengaruh tingkat kepemilikan asing dan kinerja perusahaan serta menganalisa lebih lanjut pengaruh tersebut sebagai akibat adanya regulasi pembatasan kepemilikan modal asing berupa Negative Investment List (NIL). Penelitian ini menggunakan panel perusahaan manufaktur Indonesia 2007-2014 dengan metode estimasi GMM Arellano-Bond. Hasil estimasi menunjukkan kinerja awalnya meningkat dengan kepemilikan asing, namun setelah mencapai titik tertentu kinerja menurun atau pengaruh tersebut berbentuk U-terbalik. Ini mengindikasikan kepemilikan domestik diperlukan untuk mencapai kinerja optimal. Kemudian analisa lebih lanjut menunjukkan Regulasi-NIL menekan kepemilikan modal asing, kepemilikan modal asing perusahaan NIL lebih rendah dibandingkan perusahaan Non-NIL, namun kinerja perusahaan NIL rata-rata lebih rendah.

References

Aitken, B., and A. Harrison. (1999). Do domestic firms benefit from direct foreign investment? American Economic Review 89, no. 3: 605–18.

Arellano, M., and S. Bond. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economic Studies 58, no. 2: 277–98.

Asiedu, E., Esfahani, H.S. (2001). Ownership structure in foreign direct investment projects. Review of Economics and Statistics 83, 647–662.

Becker, B., and J. Sivadasan. (2010). The effects of financial development on the investment-cash flow relationship: Crosscountry evidence from Europe. B.E. Journal of Economic Analysis & Policy (Advances) 10, no. 1: 1–47.

Benito, A. (2003). The capital structure decisions of firms: Is there a pecking order? Bank of Spain.Working Paper No. 0310.

Benito, G., & Welch, L. (1994). Foreign market servicing: Beyond choice of entry mode. Journal of International Marketing, 2(2), 7–27.

Birkinshaw, J. (2000). Entrepreneurship in the global firm. London: Sage.

Blalock, G., & Gertler, P. J. (2008). Welfare gain from foreign direct investment through technology transfer to local suppliers. Journal of International Economics, 74(2), 402–421.

Blomström, M., and F. Sjöholm. (1999). Technology transfers and spillovers: Does local participation with multinationals matter? European Economic Review 43, nos. 4–6: 915–23.

Blundell, R., S. Bond, and F.Windmeijer. (2000). Estimation in dynamic panel data models: Improving on the performance of the standard GMM estimators. In Nonstationary panels, panel cointegration, and dynamic panels, ed. B. Baltagi. Advances in econometrics, vol. 15 (53–92). Amsterdam: JAI Press, Elsevier.

Buckley, P., Clegg, J., Cross, A., Liu, X., Voss, H., & Zheng, P. (2007). The determinants of Chinese outward foreign direct investment. Journal of International Business Studies, 38(4), 499–518.

Chang, S.-J., Chung, J., & Moon, J. J. (2013). When do wholly owned subsidiaries perform better than joint ventures? Strategic Management Journal, 34(3), 317–337.

Chen, S-F. (2008). The motives for international acquisitions: Capability Procurements, Strategic Considerations, and the role of Ownership Structures. Journal of International Business Studies 39:3, 454-471.

Chen, Y.-R., Yang, C., Hsu, S.-M., & Wang, Y. D. (2009). Entry mode choice in China’s regional distribution markets: Institution vs. transaction costs perspectives. Industrial Marketing Management, 38(7), 702–713.

Chhibber, P., and S. Majumdar. (1999). Foreign ownership and profitability: Property rights, control and the performance of firms in Indian industry. Journal of Law and Economics 42, no. 1: 209–39.

Dimelis, S., and H. Louri. (2002). Foreign ownership and production efficiency: A quantile regression analysis. Oxford Economic Papers 54, no. 3: 449–69.

Genthner, R., & Kis-katos, K. (2017). The impact of foreign investment regulation on firm productivity and employment in Indonesia. Working Paper.

Girma, S., Y. Gong, and H. Görg. (2008). Foreign direct investment, access to finance and innovation activity in China. World Bank Economic Review 22, no. 2: 367–82.

Greenaway, D., Guariglia, A., & Yu, Z. (2014). The more the better ? Foreign ownership and corporate performance in China, 4364. https://doi.org/10.1080/1351847X.2012.671785

Guariglia, A., X. Liu, and L. Song. (2011). Internal finance and growth: Microeconometric evidence on Chinese firms. Journal of Development Economics 96, no. 1: 79–94.

Guthrie, D. (2005). Organizational Learning and Productivity: State Structure and Foreign Investment in the Rise of the Chinese Corporation. Management and Organization Review, 1(2), 165–195.

Hill, H. (1996). Indonesia’s industrial policy and performance: ‘Orthodoxy’ vindicated. Economic Development and Cultural Change, 45(1), 147–174.

Hsieh, C.T., and P. Klenow. (2009). Misallocation and manufacturing TFP in China and India. Quarterly Journal of Economics 124, no. 4: 1403–48.

Hult, G. T. M., Ketchen, D. J., Jr., Griffith, D. A., Chabowski, B. R., Hamman, M. K., Johnson Dykes, B., et al. (2008). An assessment of the measurement of performance in international business research. Journal of International Business Studies, 39(6), 1064–1080.

Indonesia, R. (2000). Keputusan Presiden No 96 Th 2000 tentang Bidang Usaha Yang Tertutup Dan Bidang Usaha Yang Terbuka Dengan Persyaratan Tertentu Bagi Penanaman Modal.

Indonesia, R. (2007). Peraturan Presiden No 77 Th 2007 tentang Daftar Bidang Usaha Yang Tertutup Dan Bidang Usaha Yang Terbuka Dengan Persyaratan Di Bidang Penanaman Modal.

Indonesia, R. (2010). Peraturan Presiden No 36 Th 2010 tentang Daftar Bidang Usaha Yang Tertutup Dan Bidang Usaha Yang Terbuka Dengan Persyaratan Di Bidang Penanaman Modal.

Indonesia, R. (2014). Peraturan Presiden No 39 Th 2014 tentang Daftar Bidang Usaha Yang Tertutup Dan Bidang Usaha Yang Terbuka Dengan Persyaratan Di Bidang Penanaman Modal.

Indonesia, R. (2016). Peraturan Presiden No 44 Th 2016 tentang Daftar Bidang Usaha Yang Tertutup Dan Bidang Usaha Yang Terbuka Dengan Persyaratan Di Bidang Penanaman Modal.

Javorcik, B.S., and K. Saggi. (2010). Technological asymmetry among foreign investors and mode of entry. Economic Inquiry 48, no. 2: 415–33.

Jiang, B-B, J. Laurenceson, and K. Tang. (2008). Share reform and the performance of China’s listed companies. China Economic Review 19, no. 3: 489–501.

Johanson, J., & Vahlne, J.-E. (2013). The Uppsala model on evolution of the multinational business enterprise—from internalization to coordination of networks. International Marketing Review, 30(3), 189–210.

Karabay, B., (2010). Foreign direct investment and host country policies: a rationale for using ownership restrictions. J. Dev. Econ. 93 (2), 218–225.

Kedia, B., Gaffney, N., & Clampit, J. (2012). EMNEs and knowledge-seeking FDI. Management International Review, 52(2), 155–173.

Knight, G. A., & Cavusgil, S. T. (1996). The born global firm: A challenge to traditional internationalization theory. Advances in International Marketing, 8, 11–26.

Levinsohn, J., and A. Petrin. (2003). Estimating production functions using inputs to control for unobservables. Review of Economic Studies 70, no. 2: 317–42.

Li, P. P. (2010). Toward a learning-based view of internationalization: The accelerated trajectories of cross-border learning for latecomers. Journal of International Management, 16(1), 43–59.

Lindblad, J. T. (2015). Foreign Direct Investment in Indonesia: Fifty Years of Discourse. Bulletin of Indonesian Economic Studies, 51(2):217–237.

Liu, X., & Zou, H. (2008). The impact of greenfield FDI and mergers and acquisitions on innovation in Chinese high-tech industries. Journal of World Business, 43(3), 352–364.

Luo, Y., & Tung, R. L. (2007). International expansion of emerging market enterprises: A springboard perspective. Journal of International Business Studies, 38(5), 481–498.

Mathews, J. A. (2006). Dragon multinationals: New players in 21st century globalization. Asia Pacific Journal of Management, 23(1), 5–27.

Nguyen, Q. (2011). The empirical literature on multinational enterprises, subsidiaries and performance. Multinational Business Review, 19(1), 47–64.

Raff, H., Ryan, M., & Stähler, F. (2009). International Journal of Industrial Organization Whole vs. shared ownership of foreign affiliates ☆, 27, 572–581.

Ramamurti, R. (2009). What we have learned about emerging-market MNEs? In R. Ramamurti & J. V. Singh (Eds.), Emerging multinationals in Emerging Markets. New York: Cambridge University Press.

Setiawan, M. (2019). International Review of Applied Economics Dynamic productivity growth and its determinants in the Indonesian food and beverages industry. International Review of Applied Economics, 00(00), 1–15.

Suyanto, Salim, R. A., & Bloch, H. (2009). Does Foreign Direct Investment Lead to Productivity Spillovers ? Firm Level Evidence from Indonesia. World Development, 37(12), 1861–1876.

Takii, S. (2004). Productivity differentials between local and foreign plants in Indonesian manufacturing, 1995. World Development 32, no. 11: 1957–69.

Teixeira, A. A. C., & Grande, M. (2012). Entry mode choices of multinational companies (MNCs) and host countries’ corruption . African Journal of Business Management Vol. 6(1), pp. XXX-XXX, July, 2012.

Tian, L., and S. Estrin. (2008). Retained state ownership in Chinese PLCs: Does government ownership always reduce corporate value? Journal of Comparative Economics 36, no. 1: 74–89.

United Nations Conference on Trade And Development (UNCTAD). (2016). World Investment Report 2016: Investor Nationality: Policy Challenges. Geneva: United Nations.

Welch, D. E., & Welch, L. S. (1995). The internationalization process and networks: A strategic management perspective. Journal of International Marketing, 4(3), 11–28.

World Trade Organization (1998). Trade Policy Review Indonesia 1998 - Report by the Secretary. Geneva : WTO.

World Trade Organization (2013). Trade Policy Review Indonesia 2013 - Report by the Secretary. Geneva : WTO.

Yiu, D., & Makino, S. (2002). The Choice Between Joint Venture and Wholly Owned Subsidiary: An Institutional Perspective, (October 2017). https://doi.org/10.1287/orsc.13.6.667.494

Young, Stephan, J. Hamill, C. Wheeler and J. R. Davies (1989), International Market Entry and Development: Strategies and Management. Englewood Cliffs: Prentice Hall.

Zhao, Hongxin, Luo, Yadong and Suh, Taewon. (2004). Transaction cost determinants and ownership-based entry mode choice : a meta-analytical review, 35(6), 524–544.

Share

COinS