NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Jing Sun

Skidmore College
Dept. of Economics
815 N. Broadway
Saratoga Springs, NY 12866

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NBER Working Papers and Publications

April 2010Foreign Ownership and Employment Growth in Indonesian Manufacturing
with Robert E. Lipsey, Fredrik Sjöholm: w15936
Many developing countries would like to increase the share of modern or formal sectors in their employment. One way to accomplish this goal may be to encourage the entrance of foreign firms. They are typically relatively large, with high productivity and good access to foreign markets, and might therefore be better at creating jobs than domestic firms are. However, previous research on the issue has been limited by the paucity of long data sets for firm operations. We examine employment growth in Indonesia in a large panel of plants between 1975 and 2005, and especially in plants taken over by foreign owners from domestic ones. Employment growth is relatively high in foreign-owned establishments, although foreign firms own relatively large domestic plants, which in general grow more slo...
 
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