Firm Level Competitiveness or MNC Networking? The Source of Indonesian Automotives Sector’s Performance

This paper describes and analysis the unique condition of Indonesian automotive sector. Indonesian automotive sector has been enjoying rapid annual export growth after 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 in Jakarta area and they have strong relationship with each other, those firms can be recognized as an industrial cluster namely Jakarta Automotive Cluster. The Systemic Quad cluster approach was used to explain the condition of the cluster. Beside, Firm level technological capabilities considered as an important factor above condition. The survey was conducted to examine the influence of firm level competitiveness and MNC 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 show that foreign firms have superior network cohesion and global networking also enjoy superior economic performance compare to local firms namely export incidence productivity and export percentage. The Two-tail t statistic also shows that foreign firms provide higher wage for day employees and firms also have greater number of employees. Export percentage of Indonesian Automotive Cluster influenced by high tech 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 influence constantly for foreign firms as well as local firms. It proves that global networkin