REGIONAL VALUE CHAINS AND THE INTERNATIONALISATION OF INDONESIAN BUSINESS
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For the past two decades, the Indonesian economy has experienced significant growth and development, including major changes in its corporate structure. Many Indonesian big businesses have transformed their integration with the global economy are moving from a focus on the domestic market, to become large business groups seeking international linkages through trade and investment beyond the Indonesian market. International economic activity is not something new for Indonesian businesses, which have been exporting and receiving foreign direct investment (FDI) for many decades. However, a recent qualitative change has occurred as these businesses have become integrated into complex regional value chains and have emerged as leaders (rather than just followers) of regional economic integration. The transformation carried out by Indonesian businesses is part of an internationalisation strategy that has benefited from their business networks across Southeast Asia. Internationalisation should not be viewed solely as the result of corporate strategies, however. The international activities of Indonesian business groups have in large part been driven by the development of regional economic governance mechanisms, something which became a major phenomenon for economic architecture in the Asia-Pacific region during the post-war era. Regional economic cooperation has played an important role in smoothing the process, and establishing favourable regulatory conditions, for the international operations of Indonesian businesses. In particular, two recent examples of regional economic cooperation have directly linked to the international expansion of Indonesian business groups: the ASEAN Economic Community (AEC) initiative, and the Regional Comprehensive Economic Partnership (RCEP) trade agreement.