Title : ANALYSIS OF THE INFLUENCE OF FOREIGN DIRECT INVESTMENT SPILLOVER ON THE LEVEL OF INDUSTRIAL TECHNICAL EFFICIENCY IN EAST JAVA
Author : AHMAD OKTABRI WIDYANANDA
Universitas Airlangga
Item Type : Thesis (Thesis)
Abstract
Foreign Direct Investment (FDI) plays an important role in the development process, especially in developing countries. The aim of this research is to test and analyze the effect of FDI spillover on the level of technical efficiency of large and medium industries in East Java. This study uses a time-varying frontier stochastic approach for company-level panel data in East Java. The research results show that the 5 factors in this research influence the level of technical efficiency of large and medium industries in East Java. The horizontal spillover variables of FDI and company size have a positive influence on industrial technical efficiency. The variables FDI backward spillover, FDI forward spillover and the level of market concentration have a negative effect on the level of technical efficiency. Meanwhile, the foreign share variable is proven to have no effect on the level of industrial technical efficiency. In conclusion, it is necessary to build synergies and sustainable relationships between products produced by domestic and foreign companies. Thus, the presence of foreign companies in East Java can have a positive impact on increasing the technical efficiency of domestic industry both at the upstream and downstream levels.
Keywords: Foreign Direct Investment Spillover, Technical Efficiency, East Java Industry
