Industrial Centralization in Indonesia

Trends and Determinants of the Geographical Distribution of Economic Activities: Evidence From Indonesian Manufacturing

“…This finding is consistent with that of Henderson and (1996) and with the arguments of Deichmann et al (2008) pertaining to the factor price of industrial location. In general, we identified that the effect of export activities on EGS is stronger in employment based and the effect of wage on EGS is larger in value-added based.…”

“…Furthermore, we found that interaction with the global economy encouraged firms to become more geographically concentrated; this finding is consistent with the results of Ge (2009) and He et al (2008), both in the case of China. In the case of Indonesia, this result aligns with that of Henderson and (1996) who found that there is to be a stronger spatial concentration of private manufacturing firms in the large metropolitan areas of Java Island following the trade liberalization policies of 1983. By calculating a geographical concentration index, Sjöberg and Sjöholm (2004) also revealed that Indonesian manufacturing firms that participated in international trade were more spatially concentrated and that their spatial concentration grew more strongly than did that of nonparticipating firms over the 1980-1996 period.…”

Agro-clusters and Rural Poverty: A Spatial Perspective for West Java

“…Some studies seek to identify the determinants of firms' decisions to cluster. In Indonesia, manufacturing firms have been shown to concentrate owing to access to more centralised locations, lower wages, larger local markets, better infrastructure (Henderson and Kuncoro 1996), greater technological spillovers, a higher degree of labour pooling, or a larger supply of inputs (Amiti and Cameron 2007). In addition, Deichmann et al (2008) point out that, in horizontal clustering, natural-resource-based industries benefit from what the authors call 'localisation effects'-that is, that farmers benefit from having neighbours with similar specialisations.…”

Political favoritism in China’s capital markets and its effect on city sizes

“…Work on political favoritism especially in less than democratic regimes suggests that politically important cities in countries under dictatorship enjoy substantially better amenities than their counterparts in the hinterlands (Ades and Glaeser, 1995), leading to increased urban primacy. Country-specific evidence on favoritism of the largest political cities is also documented for Indonesia in Henderson and Kuncoro (1996);and, in Albouy (2009aand, in Albouy ( , 2012, there is an analysis of bias in national taxation structures against bigger cities in the US and Canada. This paper will look in a more comprehensive fashion at differential bais across the entire set of cities in a country.…”