IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/121868.html
   My bibliography  Save this paper

Corporate Adaptation and Financial Strategies in Indonesia’s Downstream Processing Industries

Author

Listed:
  • Juhro, Solikin M.
  • Kuantan, Dhaha Praviandi
  • Oktaviandhi, Nadhil Auzan

Abstract

This study explores the response of non-financial corporations and financial intermediaries to recent regulatory changes in Indonesia’s downstream sector. It examines their participation, constraints, and funding requirements. The research employs a qualitative descriptive design, incorporating both a structured questionnaire and network analysis based on detailed financial data. The focus is on key sectors driving the development of downstream industries in Indonesia, such as palm oil processing, nickel-aluminum smelting, and vehicle assembly. The findings reveal that downstream processing generally enhances corporate performance, but the benefits are disproportionately skewed toward large enterprises. Small firms, on the other hand, encounter significant challenges, including limited processing capacity, inadequate funding, and restricted access to loans, which hinder their active participation in downstream activities. To fully realize the potential benefits of downstream processing, the study suggests that financial policies must be reformed to support businesses of all sizes across different stages of the supply chain. Additionally, improving access to financing is essential to enable smaller firms to participate more effectively in these activities. These measures would provide critical support to companies, particularly those operating at the lower levels of the value chain, thereby fostering economic growth at the local level.

Suggested Citation

  • Juhro, Solikin M. & Kuantan, Dhaha Praviandi & Oktaviandhi, Nadhil Auzan, 2024. "Corporate Adaptation and Financial Strategies in Indonesia’s Downstream Processing Industries," MPRA Paper 121868, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:121868
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/121868/1/MPRA_paper_121868.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kang, Xinyu & Wang, Minxi & Chen, Lu & Li, Xin, 2023. "Supply risk propagation of global copper industry chain based on multi-layer complex network," Resources Policy, Elsevier, vol. 85(PA).
    2. Solikin M. Juhro & Paresh Kumar Narayan & Bernard Njindan Iyke & Budi Trisnanto, 2022. "Social capital, R&D and provincial growth in Indonesia," Regional Studies, Taylor & Francis Journals, vol. 56(12), pages 2117-2132, December.
    Full references (including those not matched with items on IDEAS)

    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. Yan, Jingjing & Guo, Yaoqi & Zhang, Hongwei, 2024. "The dynamic evolution mechanism of structural dependence characteristics in the global oil trade network," Energy, Elsevier, vol. 303(C).
    2. Prabheesh, K.P. & Sasongko, Aryo & Indawan, Fiskara, 2023. "Did the policy responses influence credit and business cycle co-movement during the COVID-19 crisis? Evidence from Indonesia," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 243-255.
    3. Hao, Xiaoqing & An, Haizhong & Jiang, Meihui & Sun, Xiaoqi, 2024. "Supply shock propagation in the multi-layer network of global steel product chain: Additive effect of trade and production," Resources Policy, Elsevier, vol. 89(C).
    4. Song, Yi & Bai, Wenbo & Zhang, Yijun, 2024. "Resilience assessment of trade network in copper industry chain and the risk resistance capacity of core countries: Based on complex network," Resources Policy, Elsevier, vol. 92(C).
    5. Pilatin Abdulmuttalip & Hacıimamoğlu Tunahan, 2023. "The relationship between social capital and economic growth on a provincial and regional basis," Economics and Business Review, Sciendo, vol. 9(3), pages 153-180, October.

    More about this item

    Keywords

    Downstreaming; Financing Policies; Industrial Manufacturing; Indonesia; Supply Chain Finance;
    All these keywords.

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L70 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:pra:mprapa:121868. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    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.