Winners and Losers during a Deep Economic Crisis: Firm-level Evidence from Indonesian Manufacturing
What happens to firms during periods of deep economic crisis?
Depending on the nature of the crisis, the general effects are well known. But,
owing to data availability, there are relatively few detailed firm-level studies.
With the aid of an unusually rich data base, this paper investigates the effects
of Indonesias 1997-98 crisis on manufacturing establishments. Consistent
with studies of other crisis episodes, foreign ownership and prior export
orientation are found to be highly significant determinants of survival and
recovery. The effects of firm size are ambiguous. The industry in which firms
are located, in particular its factor proportions, is also found to be significant.