IDEAS home Printed from https://ideas.repec.org/a/taf/bindes/v35y1999i1p75-97.html
   My bibliography  Save this article

Indonesia's Ascent on the Technology Ladder: Capital Stock and Total Factor Productivity in Indonesian Manufacturing, 1975-95

Author

Listed:
  • Marcel Timmer

Abstract

This paper presents new capital stock estimates for mium and large-scale manufacturing in Indonesia using the Perpetual Inventory Method. Capital stock grew gradually during 1975-88, at an annual rate of 7.6%, then boomed during 1989-95 at 13.6% per annum. Growth accounting shows that 60% of the rapid growth of manufacturing output during the period 1975-95 was due to capital input growth, 18% to labour input growth and the remaining 22% to total factor productivity (TFP) growth. There is no evidence of a shift of factor inputs towards more efficient industries. TFP growth averaged 3% annually in 1975-95. Performance varied greatly across industries, but the policy changes that have taken effect since 1986 have definitely been beneficial for all industries. Put in an international perspective, however, Indonesia's TFP levels show no signs of catch-up with the world frontier.

Suggested Citation

  • Marcel Timmer, 1999. "Indonesia's Ascent on the Technology Ladder: Capital Stock and Total Factor Productivity in Indonesian Manufacturing, 1975-95," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 35(1), pages 75-97.
  • Handle: RePEc:taf:bindes:v:35:y:1999:i:1:p:75-97
    DOI: 10.1080/00074919912331337497
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00074919912331337497
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/00074919912331337497?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. repec:ucp:bknber:9780226304557 is not listed on IDEAS
    2. Dale W. Jorgenson, 1991. "Productivity and Economic Growth," NBER Chapters, in: Fifty Years of Economic Measurement: The Jubilee of the Conference on Research in Income and Wealth, pages 19-118, National Bureau of Economic Research, Inc.
    3. H. J. Plunkett & W. E. Morgan & J. L. Pomeroy, 1997. "Regulation of The Indonesian Cement Industry," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 33(1), pages 75-102.
    4. Robert J. Gordon, 1990. "The Measurement of Durable Goods Prices," NBER Books, National Bureau of Economic Research, Inc, number gord90-1.
    5. Alwyn Young, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 641-680.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mitsuhiko Kataoka, 2013. "Capital Stock Estimates by Province and Interprovincial Distribution in Indonesia," Asian Economic Journal, East Asian Economic Association, vol. 27(4), pages 409-428, December.
    2. Ester Gomes da Silva, 2010. "Capital services estimates in Portuguese industries, 1977–2003," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 9(1), pages 35-74, April.
    3. Peter Warr, 2006. "Productivity Growth in Thailand and Indonesia: How Agriculture Contributes to Economic Growth," Working Papers in Economics and Development Studies (WoPEDS) 200606, Department of Economics, Padjadjaran University, revised Feb 2006.
    4. Vial, Virginie & Hanoteau, Julien, 2010. "Corruption, Manufacturing Plant Growth, and the Asian Paradox: Indonesian Evidence," World Development, Elsevier, vol. 38(5), pages 693-705, May.
    5. Thee Kian Wie, 2005. "Policies Affecting Indonesia's Industrial Technology Development," Hi-Stat Discussion Paper Series d05-121, Institute of Economic Research, Hitotsubashi University.
    6. Coxhead, Ian A. & Li, Muqun, 2008. "Prospects for Skills-Based Export Growth in a Labour-Abundant, Resource-Rich Economy: Indonesia in Comparative Perspective," Staff Papers 92201, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    7. Wang, Lili & Szirmai, Adam, 2008. "Regional Capital Inputs in Chinese Industry and Manufacturing, 1978-2003," MERIT Working Papers 2008-028, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Wang, Lili & Szirmai, Adam, 2012. "Capital inputs in the Chinese economy: Estimates for the total economy, industry and manufacturing," China Economic Review, Elsevier, vol. 23(1), pages 81-104.
    9. van der Eng, Pierre, 2010. "The sources of long-term economic growth in Indonesia, 1880-2008," Explorations in Economic History, Elsevier, vol. 47(3), pages 294-309, July.
    10. Kyunghoon Kim & Arriya Mungsunti & Andy Sumner & Arief Anshory Yusuf, 2020. "Structural transformation and inclusive growth: Kuznets' 'developer's dilemma' in Indonesia," WIDER Working Paper Series wp-2020-31, World Institute for Development Economic Research (UNU-WIDER).
    11. repec:dgr:rugggd:gd-99 is not listed on IDEAS
    12. Chih‐Hai Yang & Chao‐Jing Yang & Chung‐Yueh Chiu & Hsuan‐Yu Lin, 2018. "Resource Allocation, Structural Change, and the Dynamics of Manufacturing Productivity in Indonesia," The Developing Economies, Institute of Developing Economies, vol. 56(4), pages 297-327, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rosés, Joan R., 2008. "Proximate causes of economic growth in Spain, 1850-2000," IFCS - Working Papers in Economic History.WH wp08-12, Universidad Carlos III de Madrid. Instituto Figuerola.
    2. Eaton, Jonathan & Kortum, Samuel, 2001. "Trade in capital goods," European Economic Review, Elsevier, vol. 45(7), pages 1195-1235.
    3. Charles R. Hulten, 2000. "Total Factor Productivity: A Short Biography," NBER Working Papers 7471, National Bureau of Economic Research, Inc.
    4. Voon, Jan P. & Chen, Edward K. Y., 2003. "Contributions of capital stock quality improvement to economic growth: the case of Hong Kong," Journal of Asian Economics, Elsevier, vol. 14(4), pages 631-644, August.
    5. Manuel S. Santos, 2002. "On some criteria for the formulation and testing of economic growth models," Spanish Economic Review, Springer;Spanish Economic Association, vol. 4(1), pages 1-18.
    6. Hofman, André A., 2000. "The economic development of Latin America in the twentieth century," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1650 edited by Eclac, November.
    7. Rosés, Joan R., 2008. "Long-run Estimates of Physical Capital in Spain, 1850-2000," IFCS - Working Papers in Economic History.WH wp08-07, Universidad Carlos III de Madrid. Instituto Figuerola.
    8. Young Bong Chang & Vijay Gurbaxani, 2013. "An Empirical Analysis of Technical Efficiency: The Role of IT Intensity and Competition," Information Systems Research, INFORMS, vol. 24(3), pages 561-578, September.
    9. Molinari, Benedetto & Rodríguez, Jesús & Torres, José L., 2013. "Growth and technological progress in selected Pacific countries," Japan and the World Economy, Elsevier, vol. 28(C), pages 60-71.
    10. Massimo Caruso, 2002. "Procyclical Productivity and Output Growth in China: An Econometric Analysis," Open Economies Review, Springer, vol. 13(3), pages 251-274, July.
    11. Rao, B. Bhaskara, 2010. "Estimates of the steady state growth rates for selected Asian countries with an extended Solow model," Economic Modelling, Elsevier, vol. 27(1), pages 46-53, January.
    12. Santos, João & Domingos, Tiago & Sousa, Tânia & St. Aubyn, Miguel, 2016. "Does a small cost share reflect a negligible role for energy in economic production? Testing for aggregate production functions including capital, labor, and useful exergy through a cointegration-base," MPRA Paper 70850, University Library of Munich, Germany.
    13. Lee, Jong-Wha, 2005. "Human capital and productivity for Korea's sustained economic growth," Journal of Asian Economics, Elsevier, vol. 16(4), pages 663-687, August.
    14. Keller, Elisa, 2019. "Labor supply and gender differences in occupational choice," European Economic Review, Elsevier, vol. 115(C), pages 221-241.
    15. Muhammad Shafiullah & Ravinthirakumaran Navaratnam, 2016. "Do Bangladesh and Sri Lanka Enjoy Export-Led Growth? A Comparison of Two Small South Asian Economies," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 17(1), pages 114-132, March.
    16. Valerie Jarvis & S. J. Prais, 1997. "The Quality of Manufactured Products in Britain and Germany," International Review of Applied Economics, Taylor & Francis Journals, vol. 11(3), pages 421-438.
    17. K. Narayanan & Santosh Kumar Sahu, 2010. "Labour and Energy Intensity: A Study of Pulp & Paper Industries in India," Working Papers id:3101, eSocialSciences.
    18. Jonathan Temple, 2002. "The Assessment: The New Economy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 18(3), pages 241-264.
    19. Jesper Stage, 2002. "Structural Shifts In Namibian Energy Use: An Input‐Output Approach," South African Journal of Economics, Economic Society of South Africa, vol. 70(6), pages 1103-1125, September.
    20. Euler Pereira Gonçalves de Mello & Paulo Brigido Rocha Macedo, 2003. "Total Factor Productivity, Technical Efficiency, Scale Change and Technical Change for 27 Brazilian Industries During the Period 1996-2000," Anais do XXXI Encontro Nacional de Economia [Proceedings of the 31st Brazilian Economics Meeting] d35, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:bindes:v:35:y:1999:i:1:p:75-97. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CBIE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.