The Potential Horizontal and Vertical Spillovers from Foreign Direct Investment on Indonesian Manufacturing Industries

This study investigates the potential horizontal and vertical spillovers from FDI towards firms’ efficiency level on Indonesian manufacturing industries, using firm‐level panel data. The result suggests that positive evidence of horizontal spillovers arise instantaneously, but the impacts of vertical spillovers appear a year later. These indicate that foreign competitors cause local firms more efficient in the same industry. Furthermore, after...