Examining how agglomeration, or clustering, among Indonesian manufacturing firms has changed over the past 30 years, the authors found that its most robust drivers have been natural resources and supply chain linkages, especially with respect to explaining long-term changes in spatial concentration. The authors also developed a new approach for estimating productivity spillovers across networks of firms, but they found that spillovers between manufacturers in Indonesia were significantly smaller than what has been observed in other countries.
This research was funded under the Private Enterprise Development in Low-Income Countries (PEDL) Programme
Bazzi, S., Chari, A., Nataraj, S. and Rothenberg, A. (2017), “Firm Clusters and Productivity in Indonesia”, PEDL, 5p