Inderscience Publishers

Determinants of plant performance dynamics: empirical analysis of the manufacturing sector in Indonesia, 1990-2000

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We identify determinants of plant dynamics and find their differences before, during, and after the Asian financial crisis. The results show that the distinction of the crisis is important and the effects of the crisis do not seem to persist after 1998. Furthermore, we reject Gibrat's law as the right functional form to describe plant growth. We are not able to support empirically the theoretical results that smaller and efficient plants tend to grow faster than larger and inefficient plants with the exception of the crisis period. The results reflect that there was a trickle down effect of economic development.

Keywords: plant dynamics, Asian financial crisis, Indonesian manufacturing, Indonesia, plant performance, manufacturing plants, economic development

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