Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/260203 
Year of Publication: 
2016
Series/Report no.: 
Working Paper No. 2016:31
Publisher: 
Lund University, School of Economics and Management, Department of Economics, Lund
Abstract: 
Foreign Direct Investment (FDI) has increased in importance over the last decades, globally as well as in Indonesia. We examine how such inflows of FDI affects value added in Indonesia. The effect is positive: foreign firms generate relatively high levels of value added and they also seem to have a positive impact on value added in local firms. Moreover, FDI contribute to a structural change of the economy towards more high-value added activities. High value added could lead to increased investments and higher tax revenues for the government. High value added could also benefit labor through higher wages, an effect that is empirically confirmed in Indonesia.
Subjects: 
Foreign Direct Investment
Multinational Firms
Value Added
Industrial Development
JEL: 
F23
F61
F63
Document Type: 
Working Paper

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