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What happens to industrial structure when countries liberalise? Indonesia since the mid‐1980s

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  • H.H. Aswicahyono
  • Kelly Bird
  • Hal Hill

Abstract

In the large literature on the consequences of economic liberalisation, few studies have examined the impact on industrial structure. Indonesia provides a suitable case study: its policy reforms from the mid‐1980s were decisive, and its industrial data base is relatively sophisticated. This article briefly develops a framework with which such issues may be examined, and then assesses the impact of policy reforms on seller concentration, ownership, size distribution, spatial composition, and total factor productivity growth over the pre‐ and post‐reform periods. The main conclusion is that, unlike the liberalisation‐efficiency nexus, the effects of the policy changes on industrial structure appear to be limited. Our conclusions are necessarily tentative, given the short period of time under examination, and given the difficulties — both empirical and theoretical ‐ of establishing the direction of causality.

Suggested Citation

  • H.H. Aswicahyono & Kelly Bird & Hal Hill, 1996. "What happens to industrial structure when countries liberalise? Indonesia since the mid‐1980s," Journal of Development Studies, Taylor & Francis Journals, vol. 32(3), pages 340-363.
    • Handle: RePEc:taf:jdevst:v:32:y:1996:i:3:p:340-363
    DOI: 10.1080/00220389608422419
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    References listed on IDEAS

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    1. Anne O. Krueger, 1978. "Foreign Trade Regimes and Economic Development: Liberalization Attempts and Consequences," NBER Books, National Bureau of Economic Research, Inc, number krue78-1.
    2. Hal B. Lary, 1968. "Imports of Manufactures from Less Developed Countries," NBER Books, National Bureau of Economic Research, Inc, number lary68-1.
    3. Jagdish N. Bhagwati, 1978. "Anatomy of Exchange Control Regimes," NBER Chapters, in: Foreign Trade Regimes and Economic Development: Anatomy and Consequences of Exchange Control Regimes, pages 7-52, National Bureau of Economic Research, Inc.
    4. Jagdish N. Bhagwati, 1978. "Foreign Trade Regimes and Economic Development: Anatomy and Consequences of Exchange Control Regimes," NBER Books, National Bureau of Economic Research, Inc, number bhag78-1.
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    Citations

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    Cited by:

    1. Haryo Aswicahyono & Hal Hill & Dionisius Narjoko, 2010. "Industrialisation after a Deep Economic Crisis: Indonesia," Journal of Development Studies, Taylor & Francis Journals, vol. 46(6), pages 1084-1108.
    2. Kyunghoon Kim & Andy Sumner & Arief Anshory Yusuf, 2018. "Is structural transformation-led economic growth immiserising or inclusive? The case of Indonesia," Departmental Working Papers 2018-11, The Australian National University, Arndt-Corden Department of Economics.
    3. 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).
    4. Wahyu Widodo & Ruhul Salim & Harry Bloch, 2015. "The effects of agglomeration economies on technical efficiency of manufacturing firms: evidence from Indonesia," Applied Economics, Taylor & Francis Journals, vol. 47(31), pages 3258-3275, July.
    5. Sleuwaegen, Leo & Goedhuys, Micheline, 2002. "Growth of firms in developing countries, evidence from Cote d'Ivoire," Journal of Development Economics, Elsevier, vol. 68(1), pages 117-135, June.
    6. Robert E. Lipsey & Fredrik Sjöholm & Jing Sun, 2010. "Foreign Ownership and Employment Growth in Indonesian Manufacturing," NBER Working Papers 15936, National Bureau of Economic Research, Inc.
    7. Takii, Sadayuki, 2005. "Productivity spillovers and characteristics of foreign multinational plants in Indonesian manufacturing 1990-1995," Journal of Development Economics, Elsevier, vol. 76(2), pages 521-542, April.
    8. Faundez, Sebastian & Mulder, Nanno & Carpentier, Nicole, 2011. "Productivity growth in Latin American manufacturing: what role for international trade intensities?," MPRA Paper 36507, University Library of Munich, Germany.
    9. Asep Suryahadi, 2001. "International Economic Integration and Labor Markets: The Case of Indonesia," Economics Study Area Working Papers 22, East-West Center, Economics Study Area.
    10. Sharma, Kishor, 2000. "Liberalization and Structural Change: Evidence from Nepalese Manufacturing," Center Discussion Papers 28394, Yale University, Economic Growth Center.
    11. ., 2013. "Total Factor Productivity and Economic Growth in Indonesia," Chapters, in: D. S.P. Rao & Bart van Ark (ed.), World Economic Performance, chapter 8, pages 193-226, Edward Elgar Publishing.
    12. Hal Hill, 1997. "Rapid Industrialisation in ASEAN: Some Analytical and Policy Lessons," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 4(4), pages 419-432.
    13. Sumarto, Sudarno & Suryahadi, Asep, 2004. "The Role of Agricultural Growth in Poverty Reduction in Indonesia," MPRA Paper 60724, University Library of Munich, Germany.
    14. Haryo Aswicahyono & Hal Hill & Dionisius Narjoko, 2011. "Indonesian Industrialization: A Latecomer Adjusting to Crises," WIDER Working Paper Series wp-2011-053, World Institute for Development Economic Research (UNU-WIDER).
    15. Aswicahyono, Haryo & Narjok, Dionisius, 2011. "Indonesian Industrialization," WIDER Working Paper Series 053, World Institute for Development Economic Research (UNU-WIDER).

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