Foreign investment boosts productivity in Indonesian manufacturing, benefiting local firms.
Foreign Direct Investment (FDI) in Indonesia's manufacturing industry boosts firms' productivity. The study focused on food, apparel, and motor vehicle industries from 2001 to 2014. FDI positively impacts firm productivity, especially through backward spillover. However, it has minimal effects on horizontal and forward spillover, meaning local firms don't benefit much from foreign firms in the same industry.