Abstract : Some countries produce more multinational enterprises (MNEs) than others, India and China, in particular, have produced a number of dynamic MNEs whose success abroad generates important economic benefits for the home economy. Motivated by this observation, we describe the internationalization record of Indonesia’s major business groups. Using an archival analysis method, we find that, with a few exceptions, Indonesia’s largest business grouping focus predominantly upon the domestic market. We advance two explanations for this investment pattern. The first suggest that the apparent absence of Indonesian MNEs is an accounting error, because firms outward investment is under-reported in official statistics. The second suggests that Indonesians outward foreign direct investment is impeded by a combination of institutional and firm level factors that arrest the internationalization of all but the largest firms. We discuss the policy implications of these findings and reflect on

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English

0007-4918

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April 2011, Vol. 47 No. 1

Halaman 105-126

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