Comparative Analysis of South Korean and Japanese Foreign Direct Investment in Indonesia’s Textiles Industry in 1990S  

Oleh:

Prabowo, Dibyo ; Anwar, Ratih Pratiwi

Jenis: Article from Journal - ilmiah nasional - tidak terakreditasi DIKTI
Dalam koleksi: International Journal of Business vol. 4 no. 2 (May 2002), page 237-264.
Topik: TEXTILE INDUSTRY; developed country FDI; extended dimension of kojima hypothesis; investment characteristics; japanese FDI; south korean FDI; textiles industry

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: II51.1 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

Since early new order, japan and other asia newly industrializing countries have become the most important source countries of foreign direct investment (FDI) in indonesia. While japan was in the top rank of the top ten investors during 1967 - 1999 in the cumulative of realized projects and values, south korea emerged as the second most important investors regarding the cumulative number of realized projects. In 1990 - 1998, the cummulative of total approved values of south korean FDI reached nearly one third of japanese FDI's in the same period. It is interesting to know that according to extended dimension of kojima hypothesis, japanese FDI in 1990s has characterstics similar to developed countries FDI while south korean FDI in 1990s has characteristic similar to japanese FDI when japan wqas still a developing country. The characteristic differences may give different impact and benefit to their technology and trade performances in the host country. This study examined what similarities and differences exist between south korean and japanese FDI in indonesia's textile industry in 1990, in terms of their investment characteristics. Investment characteristics involve technology level, trade dependencies and orientation, investment contribution, investment size, ownership distribution, subindustry distribution and employment generation. This study was aimed to look at whether south korean and japanese FDI characteristics in indonesia's textiles industry in 1990s fit with extended dimension of kojima hypothesis. Comparative analysis was used as a means to examine the industry level and the firm level data of 17 japanese FDI and 35 south korean FDI in indonesia's textiles industry (including garment). This present study found that, in technology performances point of view, japanese FDI showed higher labor productivity, skill intensity and capital intensity than that of south korean FDI. In trade performances point of view, japanese FDI's export and import proportions were lower than that of south korean FDI. South korean FDI was more dependent on foreign market and foreign raw material compared to japanese FDI. These findings indicate that japanese FDI used relatively higher technology level than south korean FDI and had less trade motivation both in export and import. On the other hand, south korean FDI used relatively lower technology level than japanese FDI and had more trade motivation than japanese FDI. The other findings reveal that though south korean FDI had a relatively smaller investment value per project, it had generated more employment than japanese FDI. Ownership distribution showed that both south korean and japanese FDI tended to invest with majority owned - status as the first preference. Whole - owned status was the second most preferred status for south korean FDI while japanese chosen minority - owned status. The findings of this study clearly support extended dimension of kojima hypothesis that in 1990s south korean FDI characteristics reflects developing country FDI and japanese FDI characteristics reflects developed country FDI.

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