Imported inputs on Indonesia's product varety and quality

Lili Yan Ing and Chandra Putra

Chapter 4 in Production Networks in Southeast Asia, pp 66-84 from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: Trade evolves. Production is sliced. Much of production is based in production networks. Imports are largerly used as inputs for exports. Many countries are engaged directly and indirectly in producing final products. The development of global production chains, with an increased use of imported inputs, caused a reduction of the domestic value-added content for each unit of manufacturing production and exports. However, at the same time, the increased use of imported inputs may increase overall value added (productivity).

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