Firm level competitiveness or MNC networking? The source of Indonesian automotives sector's performance

This paper describes and analysis the unique condition of Indonesian automotivesector. Indonesian automotive sector has been enjoying rapid annual export growthafter the economic crisis at the end of 90s. Actually, the import's value has been always higher than the export value. As almost of the automotive are located inJakarta area and they have strong relationship with each other, those firms can berecognized as an industrial cluster namely Jakarta Automotive Cluster. The SystemicQuad cluster approach was used to explain the condition of the cluster. Beside, Firmlevel technological capabilities considered as an important factor above condition.The survey was conducted to examine the influence of firm level competitiveness andMNC networking on the economic performance of Indonesia automotive firms. Due to the different nature of the foreign firms compare to local firms. The paper examine the nature for all firms also for foreign and local firms respectively.The results showthat foreign firms have superior network cohesion and global networking also enjoysuperior economic performance compare to local firms namely export incidenceproductivity and export percentage. The Two-tail t statistic also shows that foreignfirms provide higher wage for day employees and firms also have greater number ofemployees. Export percentage of Indonesian Automotive Cluster influenced by hightech infrastructure, global networking and technological capabilities. Especially for local firms, their export percentage mainly influenced by high tech infrastructure.Interestingly for export incidence, global networking presents strong influenceconstantly for foreign firms as well as local firms. It proves that global networking and technological capabilities have the most influence to economic performance thanother variables. But in export incidence global networking has more influences rather than firm level competitiveness.