Financing of Foreign Direct Investment and Trade Flows: The Case of Indonesia1
Open Access
- 1 April 1988
- journal article
- research article
- Published by Taylor & Francis in Bulletin of Indonesian Economic Studies
- Vol. 24 (1) , 97-114
- https://doi.org/10.1080/00074918812331335339
Abstract
This paper tries to assess the effects of implementing foreign investment in Indonesia on the country's imports from home countries. This effect is found to be sizeable as more than 50% of realised foreign investment in Indonesia is implemented m kind. 1.e. by importing plant equipment. Furthemore, sectoral kind-cash financing ratios have been correlated with sectoral loan-equity ratios of realised investment from Japan as the largest country investing in non-oil sectors. This correlation is found to be negative and is explained by the way that investment legislation provides incennves for foreign investors to pay them equity contribution in kind and convey ownership of the plant equipment to local nationals later on.Keywords
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This publication has 2 references indexed in Scilit:
- Japanese Direct Investment in Indonesian ManufacturingBulletin of Indonesian Economic Studies, 1984
- Multinational corporations and the Third World: the case of Japan and Southeast AsiaInternational Organization, 1976