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The Relationship Between Globalization and Performance: Evidence from Indonesian Medium and Big Enterprises

The Relationship Between Globalization and Performance: Evidence from Indonesian Medium and Big Enterprises
Ari Tjahjawandita, Maman Setiawan
Universitas Padjadjaran
Bahasa Inggris
Universitas Padjadjaran
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This research investigates the effect of globalization on the firm performance in the Indonesian manufacturing sector. The globalization is proxied by the trade openness and foreign direct investment. This research uses the data from Bureau of Central Statistics (BPS) for the firm performance variable and the data from UNCommTrade for the trade openness variable. The foreign direct investment variable is sourced from the Indonesian Investment Coordination Agency (BKPM). This research uses econometrics analysis of panel data and tobit regression model. This research found that globalization represented by export has a positive effect on the firm performance. Import has a negative effect on the firm performance as caused by the bulk of imported input in the products. Finally, the spill-over effect coming from FDI has a positive effect on the firm performance.

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